GBP/USD Price Analysis: Cable bears eye further downside towards 50-DMA
- GBP/USD holds lower grounds after breaking key supports and snapping two-week uptrend.
- Bearish MACD signals, steady RSI line keeps Cable bears hopeful.
- 50-DMA can prod the Pound Sterling sellers before horizontal area comprising levels marked since late March.
- 21-DMA adds strength to 1.2510 immediate resistance, bulls need validation from 1.2600 to retake control.
GBP/USD remains pressured around mid-1.2400s during early Monday, after posting the biggest weekly loss since late January in the last. In doing so, the Cable pair remains on the bear’s radar as it stays below the key support lines, now resistances, amid an absence of price-positive oscillators.
That said, bearish signals from the MACD and a steady RSI (14) allow the Cable bears to extend the previous week’s downside break of the key support lines stretched from March. Also keeping the GBP/USD bears hopeful is the quote’s sustained trading below the 21-DMA.
With this, the Pound Sterling appears well-set to decline further toward the 50-DMA support of near 1.2375.
However, a horizontal area comprising multiple levels marked since late March, around 1.2340, appears a tough nut to crack for the GBP/USD bears afterward, which if broken won’t hesitate to drag the quote towards the 1.2200 support comprising early March high and late March low.
On the contrary, a convergence of the 21-DMA and an upward-sloping trend line from March 24, around 1.2510 at the latest, restricts immediate recovery of the GBP/USD pair.
Following that, a two-month-old support-turned-resistance line near 1.2600 will be the key as a break of which could allow the Pound Sterling bulls to retake control.
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.
