GBP/USD Price Analysis: Plummets to over two-week low, seems vulnerable to slide further

The GBP/USD pair added to its heavy intraday losses and tumbled to over a two-week low, around the 1.2030 region heading into the North American session.

The prospects for more aggressive Fed rate hikes, along with growing recession fears, boosted demand for the safe-haven US dollar and prompted fresh selling around the GBP/USD pair on Friday. This marked the third day of a sharp fall in the previous four and took along some short-term trading stops placed near the 1.2100 mark.

The subsequent decline below a two-week-old descending trend-channel support confirmed a fresh bearish breakdown and supports prospects for a further near-term depreciating move. The negative outlook is reinforced by the fact that bearish technical indicators on the daily chart are still away from being in the oversold territory.

That said, RSI (14) on the 4-hour chart is already flashing overstretched conditions and warrants some caution for aggressive bearish traders. Nevertheless, the GBP/USD pair still seems poised to prolong the downward trajectory and challenge the 1.2000 psychological mark before eventually dropping to a target at the Fibonacci 61.8% extension of the height of the channel at 1.1959, and then the YTD low at around the 1.1935 zone.

On the flip side, the aforementioned ascending channel support breakpoint, around the 1.2085 region, now seems to act as an immediate resistance ahead of the 1.2100 mark. Any further move up could be seen as a selling opportunity near the 1.2140-1.2150 region. This, in turn, should cap the GBP/USD pair near the 1.2180-1.2185 supply zone.

GBP/USD 4-hour chart

Key levels to watch