GBP/USD Price Analysis: Cable bears cheer 50-DMA break to approach 1.2400
- GBP/USD takes offers to refresh intraday low, extends previous day’s pullback from three-week high.
- Steady RSI, downside break of 50-DMA join U-turn from key horizontal resistance zone to keep Cable bears hopeful.
- Sluggish MACD, 11-week-old ascending support line puts a floor under Pound Sterling price.
GBP/USD remains on the back foot around 1.2430 as it stretches the post-NFP reversal from a three-week high during the early hours of Monday’s Asian session. In doing so, the Cable pair drops below the 50-DMA support while extending the previous day’s U-turn from a horizontal resistance area comprising multiple levels marked since mid-April.
Not only the U-turn from the key resistance zone and a downside break of the 50-DMA but the steady RSI (14) line also suggest further downside of the Pound Sterling. With this, the quote is all set to prod the 1.2400 round figure.
However, the looming bull cross on the MACD indicator highlights the importance of an upward-sloping support line from mid-May, close to 1.2360 by the press time.
Even if the GBP/USD price drops below 1.2360, the 100-DMA support of around 1.2300 could act as the last defense of the bulls.
On the contrary, the 50-DMA and the aforementioned resistance area, respectively near 1.2460 and 1.2540-50, cap the GBP/USD pair’s recovery.
Also acting as an upside filter is the 1.2600 round figure, a break of which could quickly propel the Cable pair towards the yearly high marked in May near 1.2680.
GBP/USD: Daily chart
Trend: Further downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
