- GBP / USD extends the losses of the previous day and loses some additional ground on Wednesday.
- The intraday decline, for now, has found some support near a short-term uptrend line.
- The setup favors the bears and supports the prospects for a decline to the 1.3700 level.
The GBP / USD pair has extended the previous day’s sharp retracement decline from the highs of more than two weeks and has seen some selling for the second day in a row on Wednesday.
A sustained break below the 1.3800 level, which coincides with the 200 hourly simple moving average, has been considered a key trigger for intraday bears. The bearish momentum has dragged the GBP / USD pair to four-day lows, around the 1.3770 region, marking an ascending trend line support of almost two weeks.
Meanwhile, the technical indicators on the 1-hour chart have been gaining negative momentum and have only just begun to enter bearish territory on the daily chart. The setup supports the prospects for an extension of the current downtrend amid a modest pickup in demand for the US dollar.
A convincing break below the rising trend line support will reaffirm the bearish bias and make GBP / USD vulnerable to falling towards the round 1.3700 level. Some continuation selling should pave the way for a dip that retests the multi-week lows around the 1.3670 region.
On the other hand, any significant rally above the 1.3800 level could now be seen as an opportunity to initiate new bearish positions. This, in turn, should limit the GBP / USD near the 1.3840 region, at the intraday highs previously touched during the Asian session.
GBP / USD 1 hour chart
GBP / USD technical levels
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