GBP/USD Price Analysis: Down to 2-week lows, looks vulnerable to further declines

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  • GBP/USD witnessed some aggressive selling on Friday and dipped to a two-week low.
  • Technical selling below 1.2100 aggravated intraday bearish pressure.
  • The breakout of the downtrend channel supports the prospects for a further short-term decline.

The pair GBP/USD added to its heavy intraday losses and fell above a two-week low around the 1.2030 area in the American session.

Prospects for more aggressive rate hikes by the Federal Reserve coupled with growing recession fears boosted safe-haven demand for the US dollar and prompted further selling around GBP/USD on Friday.

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The subsequent decline below a downtrend channel support from two weeks ago confirmed a further bearish breakout and supports the prospects for a further short-term downside move. The negative outlook is reinforced by the fact that the bearish technical indicators on the daily chart are still far from oversold territory.

However, the RSI (14) on the 4-hour chart is already showing oversold conditions and warrants some caution for the aggressive bears. However, the GBP/USD looks poised to extend the bearish trajectory and challenge the psychological 1.2000 mark before eventually falling to a year low around the 1.1935 area.

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On the other hand, the support point of the ascending channel mentioned above, around the 1.2085 region, now seems to act as immediate resistance ahead of 1.2100. Any move higher could be seen as a selling opportunity near the 1.2140-1.2150 area. This, in turn, should cap GBP/USD near the 1.2180-1.2185 offering zone.

GBP/USD 4-hour chart

Technical levels

GBP/USD

Panorama
Last Price Today 1.2007
Today’s Daily Change -0.0170
Today’s Daily Change % -1.40
Today’s Daily Opening 1.2177
Trends
20 Daily SMA 1.2297
50 Daily SMA 1.2414
100 Daily SMA 1.2817
200 Daily SMA 1.3162
levels
Previous Daily High 1.2188
Previous Daily Minimum 1.2092
Previous Maximum Weekly 1.2324
Previous Weekly Minimum 1.2161
Monthly Prior Maximum 1.2617
Previous Monthly Minimum 1.1934
Daily Fibonacci 38.2% 1.2152
Daily Fibonacci 61.8% 1.2129
Daily Pivot Point S1 1.2117
Daily Pivot Point S2 1.2056
Daily Pivot Point S3 1.2021
Daily Pivot Point R1 1.2213
Daily Pivot Point R2 1.2249
Daily Pivot Point R3 1.2309

Source: Fx Street

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