GBP/USD analysis: dark clouds on Pound's horizon

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2806

The Pound plunged by the then end of the week, ending it at 1.2806 against the greenback, its lowest settlement for this May. The British currency got a double whammy late Thursday, affected by falling oil prices and the result of a YouGov poll on the upcoming elections, showing that PM May Conservative party lost another point, reducing its advantage by a total of 5 points during the last two weeks. The technical breakout of the 1.2900 figure alongside with dollar's strength, accelerated the decline on Friday. With elections around the corner, headlines on the matter will be the main motor for the pair during the upcoming days. Technically, the risk is clearly towards the downside although the pair has still one more critical support to take before becoming longer-term bearish, the low set on April 21st a 1.2765. In the daily chart, the price is far below a now horizontal 20 SMA, whilst the technical indicators maintain their strong downward momentum within bearish territory, in line with further slides. In the 4 hours chart, have managed to correct part of their extreme oversold readings but lost upward strength, whilst the price stands below a strongly bearish 20 SMA and broke below its 200 EMA, this last around 1.2840, for the first time in over a month, also indicating that the risk remains towards the downside.

Support levels: 1.2790 1.2765 1.2730

Resistance levels: 1.2840 1.2885 1.2920

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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