GBP/USD selling intensifies, breaks below 1.2200 handle
|Extending its reversal from Wednesday's weekly high, the GBP/USD pair has now dropped below Thursday's swing low and broke through 1.2200 handle to hit a three day low.
Currently trading at a fresh session through around 1.2180 area, the pair traded in negative territory for the third straight session. In absence of any major market moving economic releases and lack of any fresh Brexit related news / developments, the pair is being weighed down by broad based US Dollar strength, which continues to gain traction and has now surged to a fresh multi-months highs.
From technical perspective, the pair has broken below a short-term ascending trend-channel formation and hence, remains vulnerable to extend the ongoing slide. Moreover, the major has now erased all of its gains recorded during the first half of the current trading week and could be headed third consecutive week of declines.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the risk is towards the downside, with the pair trading a handful of pips above Thursday's low of 1.2209, the immediate support, and technical indicators in the 4 hours chart heading south within bearish territory, although with limited momentum. In the same chart, the price has broken below its 20 SMA that also lacks directional strength. A break below the mentioned support should lead to a continued decline towards the weekly low, at 1.2135."
"The immediate resistance is the 1.2250/60 price zone, and a recovery beyond it can see the pair advancing up to 1.2300. Above this last, the next intraday resistance comes at 1.2335, a strong static level that has contained rallies for almost two weeks."
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