The British Pound remains under pressure, having extended its decline by a few pips against the greenback, to a fresh multi-year low of 1.3840 before bouncing some. The pair plummeted last week on fears of a Brexit, as the referendum on whether to remain or not within the EU has been set for June 23rd.
In the meantime, data coming from the UK resulted generally positive, with Mortgage Approvals up to 74.6K, and Net Lending to Individuals also up during January, to £5.3B in January from previous £4.4B. Nevertheless, the numbers hardly affected the Pound.
From a technical point of view, the 4 hours chart shows that an early advance stalled at 1.3914, a handful of pips below a bearish 20 SMA, a key dynamic resistance for this Monday. The Momentum indicator in the mentioned time frame heads slightly lower below its 100 level, but lacks strength, while the RSI resumed its decline after an upward corrective movement, and stands now around 36.
Overall, the risk remains towards the downside, despite the oversold conditions seen on bigger time frames, with the pair poised to test this week 1.3501, January 2009 monthly low. Shorter term, the immediate support comes at 1.3840, with a break below it signaling a probable downward continuation towards 1.3790, particularly if US data results better-than-expected. Further declines should see the pair extending down to the 1.3750 region.
The mentioned 20 SMA, around 1.3920 is the immediate resistance, with some follow through beyond it supporting an upward corrective movement towards 1.3960 first, and 1.4000 later. Selling interest around this last however, should contain the upside.
View the live chart of the GBP/USD
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