Technical Analysis – GBPUSD remains in 1.28-1.35 post-Brexit range with negative bias

Pound/dollar has recently fallen below the psychologically important 1.30 level, but so far the post-Brexit low (1.2794) has held. Following the Brexit vote on June 23 and the huge move in the pound, pound/dollar has been spending its time in the broad 1.28-1.35 range. Right now it is closer to the bottom of that range.

Any upward reactions of the pound might be capped by the 50-day moving average at 1.3140. Note that the 200-day average is for now far removed from the picture (1.3970) as a result of the violent post-Brexit drop. On the downside, the pound’s decline will continue only once the 1.28 level is decisively broken.

Other indicators are showing bearish tendencies. For example the 14-day RSI is at 41, which indicates negative price action with room for further drops before the indicator becomes oversold. The MACD has also turned bearish during the past few days as the indicator is in negative territory and has also slipped below its red signal line. Therefore a test of the 1.28 low appears much more likely than a test of the 1.35 high right now.