- GBP / USD witnessed strong selling for the third day in a row and fell to nearly a month’s lows.
- The extremely oversold RSI on the hourly charts helped cap any further losses, at least for the moment.
- The bears could still aim to challenge the 1.3600 mark before the yearly lows, around the 1.3570 zone.
The pair GBP/USD it fell to fresh four-week lows, around 1.3650 before the American session, although it quickly rallied a few pips thereafter. The pair was last seen trading around the 1.3675 zone, shedding almost 0.50% on the day.
The US dollar remained well supported by expectations of an imminent Fed phase-down announcement and received an additional boost from the risk aversion boost in the markets. This, in turn, was seen as a key factor that dragged the GBP / USD pair lower for the third day in a row, also marking the fourth session of a negative move in the previous five.
From a technical perspective, Friday’s sustained breakout and acceptance below the 200-period SMA on the 4-hour chart was considered a key factor for bearish traders. A subsequent drop below the horizontal support at 1.3730-35 and 1.3700 compounded the selling pressure, further contributing to the ongoing strong bearish momentum.
However, the extremely oversold RSI on the hourly charts helped cap deeper losses amid the absence of relevant economic releases to move the market from either the UK or the US That said, the bias to The short term remains firmly skewed in favor of bearish traders and supports prospects for an extension of the recent sharp pullback from levels beyond 1.3900.
Therefore, a further decline towards the intermediate support at 1.3620, en route to the 1.3600 mark, remains a clear possibility. The latter coincides with the monthly lows for August, below which the GBP / USD pair is likely to further extend the downward trajectory towards challenging lows to date, around the 1.3570 region touched on July 20.
On the other hand, any significant recovery attempt could now be seen as a selling opportunity near the 1.3700 round mark. This, in turn, should put a cap to the upside for GBP / USD near the support break point of 1.3730-35. A sustained move further could trigger a short hedging move and allow the bulls to rally 1.3800.
4 hour chart
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
