GBP/USD turns up from 13-month trough, remains in descending channel [Video]
|GBPUSD has been trading within a downward sloping channel since June 1, while more recently, it hit a fresh 13-month low of 1.3193 before turning higher. Also, the price resumed its downward move after it found strong resistance around the 200-day simple moving average (SMA) and the 61.8% Fibonacci retracement level of the down leg from 1.4248 to 1.3193 at 1.3845.
GBPUSD has been trading within a downward sloping channel since June 1, while more recently, it hit a fresh 13-month low of 1.3193 before turning higher. Also, the price resumed its downward move after it found strong resistance around the 200-day simple moving average (SMA) and the 61.8% Fibonacci retracement level of the down leg from 1.4248 to 1.3193 at 1.3845.
Technically, the bias is looking bearish as the MACD oscillator is edging sideways in the negative territory, while the RSI is heading north after touching its 30 oversold level. In trend indicators, the short-term SMAs are still following the declining price action.
If sellers sink below the 13-month low of 1.3193, they could meet the return line of the descending pattern around the 1.3105 support. Steeper declines under the line would need to tackle a more durable support section from 1.2855 to the 1.2655 low to persist.
If buying interest picks up, early resistance could occur at the 1.3370 tough barrier, which overlaps with the 20-day SMA. A violation of this level may boost the pair towards the 23.6% Fibonacci of 1.3442 and the 1.3510 barrier. If advances endure past these obstacles, buyers could then target the 38.2% Fibonacci of 1.3595, before considering the break above the channel for more bullish moves.
Overall, the very short-term picture remains bearish below the descending line. A break below 1.3193 would further worsen the outlook.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.