- GBP/USD licks its wounds near the lowest levels since 1985.
- Oversold RSI conditions, short-term support line restrict immediate downside amid the UK’s bank holiday.
- Recovery remains elusive below the 21-DMA nearly resistance, key FE levels may entertain bears below the stated support line.
- Bearish trend is likely to prevail but a short-term rebound can’t be ruled out.
GBP/USD stays defensive at around 1.1415-20 during the sluggish Asian session on Monday, after bouncing off the lowest levels since 1985 the previous day.
The Cable pair’s latest rebound could be linked to the oversold RSI (14), as well as the quote’s inability to break a downward sloping support line from mid-May.
It should, however, be noted that the recovery remains elusive until the quote stays below the 21-DMA resistance level near 1.1590.
Following that, the monthly high near 1.1740 and July’s bottom surrounding 1.1760 will be in focus.
Alternatively, GBP/USD bears may keep attacking the aforementioned support line, at 1.1330 before aiming for the 61.8% and 78.6% Fibonacci Expansion (FE) levels, respectively near 1.1285 and 1.1170.
In a case where the Cable bears keep reins past 1.1170, the 1.1000 psychological magnet and the year 1985 low near 1.0520 should gain the market’s attention.
Overall, GBP/USD is likely to remain bearish but hopes of a short-term rebound remain on the table.
GBP/USD: Daily chart
Trend: Corrective bounce expected
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