GBP/USD Technical Analysis: Back below 1.35, RSI offers strongest overbought signal since January 2018

GBP/USD has backed off from 19-month highs hit in early Asia.
The RSI is flashing the strongest overbought reading in nearly two years.
The indicator can stay overbought for prolonged period in a strong trending market.

Omkar Godbole FXStreet Contributor

GBP/USD is currently trading at 1.3457, having hit a 19-month high of 1.3515 in early Asia due to the UK election exit polls predicting a big win for the incumbent Prime Minister Boris Johnson.

The pair's 14-day relative strength index (RSI) is now hovering at 80.47, the highest level since January 2018. An above 70-reading indicates overbought conditions.

So, it seems safe to say that the pair is most overbought in nearly two years.

An overbought reading on the RSI does not imply bearish reversal. It merely indicates the rally has gone too far and a pause could be in the offing.

Also, in a strong trending market, indicators can stay overbought longer than sellers can stay solvent.

That said, the GBP/USD pair has rallied by nearly 1300 pips in the last two months and seems to have priced in Johnson's victory.

So, a "sell the fact" pullback in GBP could be seen once the official results confirm victory for Johnson's Conservative party.

Daily chart

Trend: Overbought

Technical levels

GBP/USD

Overview
Today last price	1.3456
Today Daily Change	0.0285
Today Daily Change %	2.16
Today daily open	1.3171

Trends
Daily SMA20	1.3002
Daily SMA50	1.2857
Daily SMA100	1.2555
Daily SMA200	1.2698

Levels
Previous Daily High	1.323
Previous Daily Low	1.3051
Previous Weekly High	1.3167
Previous Weekly Low	1.2896
Previous Monthly High	1.2986
Previous Monthly Low	1.2769
Daily Fibonacci 38.2%	1.3119
Daily Fibonacci 61.8%	1.3161
Daily Pivot Point S1	1.3071
Daily Pivot Point S2	1.2971
Daily Pivot Point S3	1.2892
Daily Pivot Point R1	1.325
Daily Pivot Point R2	1.333
Daily Pivot Point R3	1.343

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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