- GBP / USD extends downside move amid Delta variant fears of covid.
- GBP / USD is targeting a daily close below the key support line.
- Monday’s close below the 200-day SMA and a bearish RSI keeps sellers hopeful.
GBP / USD bears remain relentless, spreading losses for the fourth day in a row on Tuesday, as the technical setup continues to mark more downside risks.
With Brexit news on the back burner, the main cause for concern over GBP bulls remains the cases of the Delta variant of covid in the UK, as the country lifted most social restrictions on Monday.
Concerns about escalating covid cases in the UK amid reopening led GBP / USD to break horizontal trend line support (orange) at 1.3633 on the daily chart.
The bears await a daily close below that level to confirm an extension of the latest downtrend, which could open the doors towards February lows at 1.3567.
Before that support, the round 1.3600 level could test the bulls’ commitment.
The RSI is moving lower, but is outside of the oversold region, suggesting that there is some room for further decline.
Meanwhile, Monday’s close below the 200-day moving average, now at 1.3702, adds credibility to the negative bias.
GBP / USD daily chart
On the other hand, if the aforementioned key trend line support holds, a bounce towards the upward sloping 200 SMA remains on the table.
The next stop for the bulls can be seen at the July 19 high at 1.3677.