GBP/USD Price Analysis: Bears now await a break below 100-day SMA support

Resurgent USD demand prompted some aggressive selling around GBP/USD on Friday.
The sharp intraday decline managed stalled near 100-DMA, around the 1.3670 region.
The set-up still favours bearish traders and supports prospects for further weakness.

Haresh Menghani FXStreet

The GBP/USD pair witnessed some aggressive selling on the last trading day of the week and tumbled to over two-month lows, around the 1.3670 region. A strong pickup in the US Treasury bond yields assisted the US dollar to stage a solid rebound from two-week lows. This, in turn, was seen as a key factor that exerted some heavy downward pressure on the GBP/USD pair.

Sustained weakness below the 1.3700 mark further aggravated the intraday bearish pressure. The GBP/USD pair, however, managed to find some support near the 100-day SMA and recovered around 50 pips, though lacked any follow-through. The pair now seems to have stabilized near the 50% Fibonacci level of the 1.3188-1.4243 strong move up. This marks a congestion zone on the way up to multi-year tops and should now act as a pivotal point for traders.

Meanwhile, technical indicators on the daily chart maintained their bearish bias and are still far from being in the oversold territory. The set-up favours bearish traders and supports prospects for additional near-term weakness. The GBP/USD pair remains vulnerable to break below the 1.3600 round-figure mark and drop to test the 61.8% Fibo. level, around the 1.3580-70 region. This nears the February monthly swing lows and might limit any further decline.

That said, some follow-through selling would mark a fresh bearish breakdown and drag the GBP/USD pair further towards the 1.3500 psychological mark. The downward trajectory could get extended towards YTD lows, around mid-1.3400s.

On the flip side, the 1.3730 area now seems to act as immediate resistance. Any subsequent move up might be seen as a selling opportunity and remain capped near the overnight swing highs, around the 1.3780 region. This is closely followed by the 1.3800 mark and the 38.2% Fibo. level, around the 1.3820-25 region. A sustained move beyond will negate the bearish outlook and prompt some short-covering move, pushing the GBP/USD pair to the 1.3900 mark.

GBP/USD daily chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.3702
Today Daily Change	-0.0030
Today Daily Change %	-0.22
Today daily open	1.3732

Trends
Daily SMA20	1.3822
Daily SMA50	1.3854
Daily SMA100	1.3682
Daily SMA200	1.3328

Levels
Previous Daily High	1.3783
Previous Daily Low	1.3719
Previous Weekly High	1.3853
Previous Weekly Low	1.3706
Previous Monthly High	1.4017
Previous Monthly Low	1.3671
Daily Fibonacci 38.2%	1.3743
Daily Fibonacci 61.8%	1.3758
Daily Pivot Point S1	1.3707
Daily Pivot Point S2	1.3681
Daily Pivot Point S3	1.3643
Daily Pivot Point R1	1.377
Daily Pivot Point R2	1.3808
Daily Pivot Point R3	1.3834

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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