GBP/USD Price Analysis: Retreats from 200-SMA, weekly resistance line, Cable bears eye 1.2425
|- GBP/USD takes offers to refresh intraday low, fades the previous day’s corrective bounce off three-week low.
- Convergence of 200-SMA, one-week-old descending trend line guards Sterling Pound’s immediate upside.
- One-month-old rising support line can prod the Cable pair sellers.
GBP/USD prints three-day downtrend despite positing mild losses around 1.2480 during early Thursday, fading the previous day’s bounce off a three-week low.
In doing so, the Pound Sterling takes a U-turn from the convergence of the 200-SMA and a downward-sloping resistance line from May 10, close to 1.2490 at the latest. Adding strength to the pullback moves are the steady RSI (14) line and sluggish MACD signals.
As a result, the Cable pair appears all set to drop towards the 61.8% Fibonacci retracement level of its April-May upside, near 1.2430. However, a one-month-old ascending support line, close to 1.2425 by the press time, appears a tough nut to crack for the GBP/USD bears afterward.
In a case where the GBP/USD price drops below 1.2425, the odds of witnessing a quick fall toward a five-week-old horizontal support zone near 1.2355-45 can’t be ruled out.
On the flip side, the GBP/USD pair’s recovery needs to provide a successful break of the 1.2490 resistance confluence to convince buyers.
Following that, the tops marked during mid-April and 23.6% Fibonacci retracement, respectively near 1.2545 and 1.2585, may challenge the Cable pair buyers before directing them to the recently marked multi-day peak of 1.2680.
GBP/USD: Four-hour chart
Trend: Limited downside expected
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.