GBP/USD bears drive the market; downside correction in progress.
GBP/USD fell as low as 1.3936, a level that is standing near the 20-day simple moving average during today’s Asian session. The pair tumbled aggressively in the last couple of days and the risk is still to the downside as price continues to move with weak movement. Also, the short-term technical indicators are bearish and point to more downside correction in the market.
In the daily timeframe, the parabolic SAR indicator is signaling further losses as the price is trading below it. The RSI indicator completed a steep downside movement, however, currently is pointing slightly to the upside. The MACD oscillator is heading down and posted a bearish crossover with its trigger line in the positive territory.
Remaining in the same timeframe, the bearish phase remains in play especially if cable continues to trade below the 1.3980 resistance level. The next pause to have in mind is the 23.6% Fibonacci retracement level at 1.3817 of the up-leg from 1.2100 to 1.4345. A slip below that level could open the door for the 1.3660 support barrier, which is near the 40-day SMA.
To the upside, if price surpasses 1.3980, it could move towards the 1.4280 barrier. A break above the aforementioned obstacle could take the price towards the 1.4345 strong resistance level, the highest level since June 2016.
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