GBP/USD Price Analysis: Retreats towards 1.2050, bearish megaphone, 200-HMA eyed
|- GBP/USD remains sluggish inside a one-week-old bearish megaphone bearish chart pattern.
- RSI backs lower high on prices to keep sellers hopeful.
- More volatility likely ahead of directing bears to yearly low.
- 200-HMA adds to the upside filters, taming bull’s chances of entry.
GBP/USD fades upside momentum as the quote retreats to 1.2082 heading into Tuesday’s London open. Even so, the cable pair remains inside the weekly megaphone trend widening formation.
That said, the bearish move since the previous Monday joins lower high of RSI and prices to keep sellers hopeful.
With this, the GBP/USD sellers could drop to 61.8% Fibonacci retracement of July 21 to August 01 upside, near 1.2045.
However, the stated megaphone’s lower line and July 21 low, respectively near 1.1940 and 1.1890 in that order, could challenge the pair bears before directing them to the yearly low near 1.1760.
Alternatively, recovery moves need to defy the bearish continuation pattern by crossing the 1.2115 hurdle.
Even so, the 200-HMA hurdle near 1.2155 acts as an extra challenge for the GBP/USD bulls before targeting the monthly peak of 1.2293.
To sum up, GBP/USD weakness is likely to continue but the odds favoring more volatility are high.
GBP/USD: Hourly chart
Trend: Further weakness expected
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