Sunday, September 22, 2019
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Technical Analysis – GBP/USD drifts to 4-month lows

GBP/USD drifts to 4-month lows; is strongly bearish.

GBP/USD sank to a fresh four-month low of 1.2708 today, creating a strong negative rally after the pullback on 1.3175.

The negative bias in the near term is supported by the deterioration in the momentum indicators. The %K line of the stochastic oscillator has fallen sharply into oversold levels and is attempting a bullish crossover with the %D line. However, the MACD is strengthening its bearish momentum.

If prices continue to head lower, support should come from the 1.2665 level, taken from the lows on January 15, while a successful penetration of this level could reinforce the short-term strong downward movement and open the way towards the 1.2475 level.

On the other side, if an upside correction takes place, immediate resistance could be faced near the 61.8% Fibonacci retracement level of the up leg from 1.2390 to 1.3380, around 1.2770. If there is a break above this significant area, the price could jump towards 1.2865 and the 50.0% Fibonacci of 1.2885 level.

In brief, the decline beneath the 61.8% Fibonacci has endorsed the bearish run in the short-term and traders can now turn their attention to critical levels. Only a jump above the near-term moving averages could switch the bias back to positive.


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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


Source: XM

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