GBP/USD Price Analysis: Bounces off multi-week low, shows some resilience below 50% Fibo.

GBP/USD dropped to a fresh multi-week trough, though found support ahead of the monthly low.
The set-up still favours bearish traders and supports prospects for a further depreciating move.
Attempted recovery could be seen as a selling opportunity near the 1.3530 support breakpoint.

Haresh Menghani FXStreet

The GBP/USD pair extended its recent pullback from the vicinity of mid-1.3700s, a two-month high, and witnessed some selling for the fourth successive day on Tuesday.

The downward trajectory dragged spot prices to a fresh three-week bottom during the mid-European session, though stalled just ahead of the monthly swing low. The GBP/USD pair once again showed some resilience below the 50% Fibonacci retracement level of the 1.3161-1.3749 up move and has now recovered to the 1.3465 area.

Given the overnight breakthrough, the 100-day SMA, the 38.2% Fibo. confluence and the subsequent slide below the 1.3500 psychological mark – the bias remains tilted in favour of bearish traders. Any attempted recovery, therefore, runs the risk of fizzling out rather quickly and remain capped amid the UK political crisis.

The near-term negative outlook is reinforced by the fact that technical indicators on the daily chart have just started drifting into negative territory. A subsequent slide below the monthly swing low, around the 1.3430 region, will reaffirm the bearish bias and set the stage for a further near-term depreciating move.

The GBP/USD pair might then turn vulnerable to an accelerated downfall towards the 1.3400 mark, en-route the 61.8% Fibo. level support, around the 1.3380 region. Some follow-through selling has the potential to drag spot prices further towards the next relevant support near the 1.3320 horizontal zone.

On the flip side, the 1.3500 mark now seems to act as an immediate resistance ahead of the 1.3530-1.3535 confluence support breakpoint. Sustained strength beyond could trigger a short-covering bounce and allow bulls to aim back to reclaim the 1.3600 mark, which coincides with the 23.6% Fibo. level resistance.

GBP/USD daily chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.3468
Today Daily Change	-0.0019
Today Daily Change %	-0.14
Today daily open	1.3487

Trends
Daily SMA20	1.357
Daily SMA50	1.3421
Daily SMA100	1.354
Daily SMA200	1.373

Levels
Previous Daily High	1.3566
Previous Daily Low	1.344
Previous Weekly High	1.369
Previous Weekly Low	1.3546
Previous Monthly High	1.355
Previous Monthly Low	1.3161
Daily Fibonacci 38.2%	1.3488
Daily Fibonacci 61.8%	1.3518
Daily Pivot Point S1	1.343
Daily Pivot Point S2	1.3372
Daily Pivot Point S3	1.3304
Daily Pivot Point R1	1.3555
Daily Pivot Point R2	1.3623
Daily Pivot Point R3	1.368

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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