GBPUSD Pulls Below 1.3200; Bearish But Not Too Bearish

GBPUSD came under recent selling pressures after its rebound of 1.3000 touched the 20-day simple moving average (SMA) and the 1.3200-round level, with the price slowing to an intra-day low of 1.3119 on Tuesday. The pair is also struggling to maintain strength above 23.6% Fibonacci retracement of the 1.1409 – 1.4248 up leg at 1.3163.

The fast Stochastic pivoted south near its 80-year overbought level, reflecting fading buying interest. However, with the RSI maintaining its upward trajectory within the bearish region and the MACD, albeit negative, hovering comfortably above its red signal line, hopes of a reversal could last a little longer, especially if the 1.3100 mark manages to add a strong base. below the price.

If the above scenario is realized, the pair may re-challenge the 20-day SMA and the 1,3200 number. Successful penetration at this point could send the price to the 1.3315 barrier, while higher, the 50-day SMA at 1.3390 and the 1.3420 level could be another obstacle. However, the bearish trajectory in the broad picture may not face risks unless the build-up extends beyond the 200-day SMA at 1.3578 and the down-sloping canal.

Is the 1.3100 floor collapse, the door would open for the 1.3000 level. Further declines from here would worsen the negative outlook below the bearish channel, bringing the 1.2850 handle and the 50% Fibonacci of 1.2820 following into view. Falling lower, sales may rest somewhere near 1.2670, which was last active during the period April – September 2020.

In short, GBPUSD maintains a bearish outlook in the near term despite last week’s reversal. That said, retailers may not engage in new sales activity unless the price plunges below 1.3100.