GBP/USD Price Analysis: 1.3570 is the next relevant target for bears
|- GBP/USD continued losing ground on Friday and dropped to one-month lows in the last hour.
- Sustained USD buying, disappointing UK macro data bot contributed to the ongoing downfall.
- Weakness below July swing lows will set the stage for an extension of the depreciating move.
The GBP/USD pair added to the previous day's heavy losses and witnessed some follow-through selling on the last day of the week. This marked the fourth day of a negative move in the previous five and dragged the pair to the 1.3600 neighbourhood, or one-month lows during the mid-European session.
The prevalent risk-off environment, along with expectations that the Fed will begin rolling back its pandemic-era stimulus pushed the safe-haven US dollar to a nine-and-half-month high on Friday. Apart from this, the disappointing release of the UK monthly Retail Sales figures weighed on the British pound and contributed to the GBP/USD pair's ongoing decline.
From a technical perspective, the overnight slide confirmed a double-top breakdown through the neckline support near the 1.3725 region. Subsequent weakness below the 1.3700 mark validated the bearish set-up and contributed to the ongoing decline. However, oversold RSI on hourly charts held traders from placing fresh bearish bets, at least for the time being.
Nevertheless, the bias remains tilted firmly in favour of bearish traders and supports prospects for a fall back towards retesting July monthly swing lows, around the 1.3570 region. This is followed by support near mid-1.3500s, below which the downward trajectory could further get extended and drag the GBP/USD pair towards challenging the key 1.3500 psychological mark.
On the flip side, any attempted recovery back above the 1.3640-50 region might now confront stiff resistance ahead of the 1.3700 mark. A sustained strength beyond might prompt some short-covering move towards the 1.3680-90 zone. The momentum might still be seen as a selling opportunity and runs the risk of fizzling out quickly, rather remain capped near the 1.3725 support breakpoint.
GBP/USD daily chart
Technical levels to watch
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.