GBP/USD Price Analysis: Bearish harami confirmed as Pound slumps below 1.2700
|- GBP/USD drops to 1.2683, marking a new four-week low of 1.2656 amidst risk aversion.
- Technical outlook: Bearish momentum as RSI falls below 50; potential support at 1.2643/38, 50-DMA at 1.2611, and 200-DMA at 1.2547.
- Resistance at 1.2700; if breached, expect consolidation in the range of 1.2700-1.2750.
The Pound Sterling dropped sharply below the 1.2700 figure as risk aversion took its toll on most G7 currencies, except for safe-haven peers like the Greenback. Political turmoil in Europe sent the Euro collapsing against the Swiss Franc, while the GBP/USD falls 0.62% and traded at 1.2683 at the time of writing.
GBP/USD Price Analysis: Technical outlook
From a technical standpoint, the GBP/USD has shifted neutral to downward biased, with momentum hinting that sellers are gathering traction. The Relative Strength Index (RSI) has fallen below 50, turning bearish, while price action shows the pair printed a new four-week low of 1.2656, opening the door for additional losses.
If GBP/USD pierces the confluence of the 100-day moving average (DMA) and May 3 swing high turned support at around 1.2643/38, that would accelerate the downtrend, exposing the 50-DMA at 1.2611, ahead of 1.2600. Further losses are seen below the figure, with the 200-DMA at 1.2547 up next.
Conversely, if buyers moved in and reclaim 1.2700, the GBP/USD could consolidate at around 1.2700-1.2750, as stir resistance lies ahead.
GBP/USD Price Action – Daily Chart
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