GBP/USD Price Analysis: Challenges critical support near 1.3630 after 200-DMA caves in
|- GBP/USD extends the rout amid looming Delta covid variant fears.
- The cable eyes a daily closing below the key daily support line.
- Monday’s closing below 200-DMA, bearish RSI keep sellers hopeful.
GBP/USD bears remain relentless, extending losses for the fourth straight day on Tuesday, as the technical setup continues to flag further downside risks.
With Brexit headlines in the background, the main cause for concern for the GBP bulls remains the spiking cases of the Delta covid variant in the UK, as the Kingdom removed most of the social curbs on Monday.
Concerns over escalating covid cases in the UK amid the reopening prompted GBP/USD to breach the horizontal (orange) trendline support at 1.3633 on the daily sticks.
The bears await a daily closing basis below that level to confirm an extension of the latest downtrend, which could open floors towards the February lows of 1.3567.
Ahead of that support, the 1.3600 round number could test the bullish commitments.
The Relative Strength Index (RSI) edges lower but sits outside the oversold region, suggesting that there is some scope left for further downside.
Meanwhile, Monday’s close below the 200-Daily Moving Average (DMA), now at 1.3702, adds credence to the negative bias.
GBP/USD daily chart
Alternatively, if the abovementioned key trendline support holds up, a rebound towards the upward-sloping 200-DMA remains well on the cards.
The next stop for the bulls could be then seen at the July 19 high of 1.3677.
GBP/USD additional 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.