- GBP/USD is expected to hit a new multi-decade low after falling below 1.1200.
- The downtrend line from 1.1738 has acted as a major roadblock for the pair.
- The falling 50 EMA at 1.1290 is another sign to the downside.
The GBP/USD pair has broken below the consolidation formed in a narrow range of 1.1250-1.1275 in the Asian session. The asset is moving lower after facing hurdles around 1.1350 on Thursday. The pound is expected to retest the new multi-decade low at 1.1211 and then the auction structure will decide the fate of the asset.
On an hourly basis, the pair is heading lower towards 1.1211 after dipping below 1.1250. Horizontal resistance drawn from the 16th Sep low at 1.1351 has acted as a major roadblock for pound bulls. Furthermore, the downtrend line placed from the 13th September high at 1.1738 has prevented the sterling bulls from turning bullish.
The 50-period EMA at 1.1290 is hinting at further weakness.
An examination of the Relative Strength Index (RSI) (14) shows that the momentum oscillator found resistance around 60.00 and is now poised to move into the bearish range of 20.00-40.00. If this occurs, the pound bulls will weaken further.
After giving up the new multi-decade low at 1.1211, the pound will retrace towards the 4th Feb 1985 high at 1.1160, followed by round level support at 1.1100.
Alternatively, pound bulls could regain strength and carry GBP/USD towards Tuesday’s high at 1.1461 and psychological resistance at 1.1500, if the asset manages to break above Thursday’s high at 1.1363.
GBP/USD Hourly chart
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Source: Fx Street
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