GBP/USD analysis: poised to extend its decline

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2173

The British Pound fell sharply against all of its major rivals, hitting 1.2123 against the greenback, its lowest since late October, before bouncing modestly. Comments from UK's Prime Minister, Theresa May, revived fears of a "hard Brexit," as in a television interview, she somehow hinted that leaving the EU will also mean leaving the single market, as the government does not want to keep "bits" of EU membership, but seek for the “best possible deal for UK companies to be able to trade in and within the EU and European companies to operate and trade within the UK.” The GBP/USD pair reached extreme oversold conditions, but remains well below the 1.2200 level, unable to attract buyers, and poised to extend its decline, given that in the 4 hours chart, the price accelerated its slide far below a now bearish 20 SMA, the Momentum indicator keeps heading south, despite being in extreme oversold territory, whilst the RSI indicator holds around 32, losing its bearish strength, but far from reversing it. October 25th low, at 1.2088 is the level to watch, as a break below it will open doors for a test of the critical 1.2000 figure.

Support levels: 1.2125 1.2085 1.2050

Resistance levels: 1.2200 1.2240 1.2290

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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