GBP/USD Price Analysis: Dives to 1.1800 neighbourhood, lowest since March 2020

GBP/USD witnessed heavy selling for the second straight day on Tuesday.
Sustained USD buying interest was seen as a key factor exerting pressure.
The set-up supports prospects for a fall to the descending channel support.

Haresh Menghani FXStreet

The GBP/USD pair added to the overnight heavy losses and witnessed some selling for the second straight day on Tuesday. The bearish pressure remained unabated through the early European session and dragged spot prices to the 1.1800 neighbourhood, or the lowest level since March 2020.

The US dollar prolonged its recent strong bullish run and shot to a fresh two-decade high, bolstered by hawkish Fed expectations and the prevalent risk-off environment. This, in turn, was seen as a key factor that continued exerting downward pressure on the GBP/USD pair.

Given the overnight break below the previous YTD low, around the 1.1875 region, the subsequent weakness favours bearish traders. Hence, some follow-through weakness towards the 1.1800 round-figure, en-route the 1.1750 support zone, now looks like a distinct possibility.

The latter represents the lower boundary of over a two-week-old descending trend channel and should act as a strong base for the GBP/USD pair. That said, a convincing break through the said support would mark a fresh breakdown and pave the way for further losses.

On the flip side, any meaningful recovery attempted might now attract fresh sellers near the previous YTD low, around the 1.1875 region. This, in turn, should cap the GBP/USD pair around the 1.1900 round-figure mark, which is likely to act as a key pivotal point for traders.

Sustained strength beyond could lift the GBP/USD pair to the 1.1935-1.1940 intermediate resistance en-route the 1.2000 psychological mark. The latter represents a confluence hurdle comprising of 50-period SMA on the 4-hour chart and the top end of the descending channel.

GBP/USD 4-hour chart

Key levels to watch

GBP/USD

Overview
Today last price	1.1816
Today Daily Change	-0.0078
Today Daily Change %	-0.66
Today daily open	1.1894

Trends
Daily SMA20	1.2144
Daily SMA50	1.2331
Daily SMA100	1.2708
Daily SMA200	1.3107

Levels
Previous Daily High	1.2039
Previous Daily Low	1.1866
Previous Weekly High	1.2165
Previous Weekly Low	1.1876
Previous Monthly High	1.2617
Previous Monthly Low	1.1934
Daily Fibonacci 38.2%	1.1932
Daily Fibonacci 61.8%	1.1973
Daily Pivot Point S1	1.1828
Daily Pivot Point S2	1.1761
Daily Pivot Point S3	1.1656
Daily Pivot Point R1	1.2
Daily Pivot Point R2	1.2105
Daily Pivot Point R3	1.2172

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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