GBPUSD has been in a downtrend since mid-2015 and reached the lowest since March 2009 at $1.3834 on February 29 this year. Since then the market has stabilized in a range between $1.4040 and $1.4510. The risk is tilted to the downside though as RSI has fallen below 50 and entered bearish territory. Also, the market has failed to break above the daily Ichimoku cloud after several attempts. Rejection of the cloud adds to the underlying bearish market structure. Meanwhile, the tenkan-sen and kijun-sen lines are negatively aligned, highlighting downside risk and suggesting short-term rises are likely to be corrective.
The short term bias is neutral and there is scope to target the key 1.4000 level. Failure to support at this level would see a retest of the 2009 low at 1.3834 and below this a resumption of the long term downtrend. Only a move above the cloud and above 1.45 would shift the underlying bearish market structure.
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