- GBP / USD flirts with key support at the 50 hourly SMA at 1.3758.
- The 1 hour chart paints a bearish picture for GBP / USD.
- The bearish crossover of the 100 and 200 hourly SMAs supports the scenario of further declines.
After an impressive rally seen on Wednesday, sellers have returned ahead of the European session opening on Thursday, pulling GBP / USD down to critical support.
Powerful support lies at the 50 hourly moving average at 1.3758, which the pair’s bulls have managed to regain in the last hour after a brief break below this level.
If GBP / USD closes the hourly candle below the key support mentioned above, a sharp decline towards the uptrend line support at 1.3731 cannot be ruled out.
Lower down, the bears could challenge the March 30 low of 1.3706 if the slide gains momentum.
The RSI is heading lower, heading into the oversold region while below the 50 level, which leaves room for further declines.
A bearish crossover detected in such a time frame also adds credibility to the bearish bias. The 200 hourly SMA has crossed below the 100 hourly SEMA from above, showing a bearish crossover.
On the other hand, if the bulls manage to resist above the support of the 50 hourly SMA, then a test of the strong resistance around 1.3770 could be on the table. That level is the confluence zone of the SMA 100 and SMA 200.
The next bullish target for buyers is at 1.3781, the bearishly sloping 21-hour SMA.
All in all, the path of least resistance looks to the downside in the short term.
GBP / USD 1 hour chart
GBP / USD additional levels
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