- GBP/USD remains depressed within fortnight-old bearish channel, stays below the key EMA confluence.
- Steady RSI, bullish MACD signals allow Cable bears to take a breather.
- 78.6% Fibonacci retracement, previous monthly low lures Pound Sterling bears.
GBP/USD fades the previous day’s rebound from a two-month low as it retreats to 1.2345 during early Monday morning in Asia. In doing so, the Cable pair remains within a two-week-old descending trend channel.
It’s worth noting that the latest initial agreement on the US debt ceiling extension may allow the US Dollar to pare some of its latest gains should the policymakers assent to the deal in the Congress voting. However, the holidays in the US and the UK on Monday and recent dissatisfaction among the Democrats and, as well as among the Republicans, from the deal may prod the Cable pair buyers.
Also read: US President Biden: This deal is good news for the American people
That said, the near 50.0 levels of the RSI (14) and bullish MACD signals prod the GBP/USD bears and can allow them to target the 61.8% Fibonacci retracement of the upside from late March to early May, close to 1.2380 by the press time.
Following that, the aforementioned channel’s top line, around the 1.2400 round figure, will be in the spotlight as a break of which will defy the bearish chart formation and can lure the Pound Sterling buyers.
However, a convergence of the 200-bar Exponential Moving Average (EMA) and the 100-EMA, around 1.2440-45, appears a tough nut to crack for the GBP/USD buyers, a break of which will allow the bulls to retake control.
On the contrary, the latest swing low of around 1.2300 and the 78.6% Fibonacci retracement level of near 1.2295 can restrict the immediate downside of the Cable pair. Also acting as short-term key support is the stated channel’s lower line surrounding 1.2285.
Overall, GBP/USD may witness a corrective bounce but the trend remains bearish until the quote surpasses the 1.2440-45 hurdle.
GBP/USD: Four-hour chart
Trend: Further downside expected
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