Technical Analysis – GBPUSD downtrend could stay in play
GBPUSD returned to the red zone on Tuesday, plunging to a new two-and-a-half-month low of 1.2527 after Monday’s bullish efforts evaporated immediately near the 1.2625 constraining area.
The trend has been negative since July and the bearish crossing of the 20- and 50-day SMAs is causing concern for the near future. Moreover, the technical indicators are pointing to a continuous decline as the RSI has reversed course back to the downside below its 50 neutral mark, and the MACD has plunged below its red signal line.
Selling forces could take a breather somewhere between the 50% Fibonacci mark of the 1.1800-1.3141 uptrend at 1.2470 and the 200-day SMA at 1.2420. If the bears breach that border, the downtrend could gain another leg to 1.2300, where the 61.8% Fibonacci is located. Running lower, the pair may next test the 1.2185 barrier.
On the upside, the 38.2% Fibonacci number of 1.2625 and the 20-day SMA could cap any potential increases. The bulls will have to drive above the 1.2700 round level too in order to reach the 50-day SMA at 1.2770. Then, the 23.6% Fibonacci of 1.2820 could prevent an extension towards the broken support trendline from October 2022.
In short, GBPUSD remains attractive to sellers as the pair keeps trading within a bearish environment. The next stop could be within the 1.2420-1.2470 region.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
