- GBP / USD has broken the key support near 1.3740.
- The path of least resistance appears to the downside for GBP / USD.
- The RSI is pointing down below the midline amid a looming bearish cross.
GBP / USD is attacking the 1.3700 level, while the strength of the US dollar remains the key issue at the start of the European session on Thursday.
GBP / USD is suffering from a strong dollar led by FOMC minutes, as well as slowing inflationary pressures in the UK and Brexit concerns.
The pair is now trading at 1.3699, down 0.41% on the day, after finally breaking the uptrend support line, now at 1.3739. The line connects the lows of the previous day and the lows of July.
After defending that key support for two consecutive sessions, the bulls finally gave in to the selling pressure on Thursday.
The move lower came after the pair marked a daily close below the 200 daily moving average (DMA) at 1.3789 on Tuesday.
Furthermore, the 14-day RSI is pointing south below the midline, suggesting that downside risks remain intact.
Adding credibility to a possible further move to the downside, the 50 SMA is rapidly approaching the 21 SMA, with a break to the downside confirming a bearish crossover.
A daily close below the 1.3700 level could expose the July lows at 1.3672. Lower down, the 1.3650 psychological level could be tested if sellers extend their grip.
GBP / USD daily chart
On the other hand, any bounce could need acceptance above the 200 SMA to ease downward pressures in the near term.
The 21 SMA at 1.3844 could act as strong resistance on the road to recovery.
GBP / USD additional levels
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