• GBPUSD stuck in a steep decline since mid-July

  • Bounces off seven-month low but fails to post a moderate recovery

  • Completion of death cross could induce downside pressures

 

GBPUSD has been forming a structure of lower highs and lower lows since its 16-month peak of 1.3141. Meanwhile, in the near term, both the RSI and the stochastic oscillator are tilted to the bearish side, shattering the bulls' hopes for a sustained rebound.

GBPUSD

Should the downtrend resume, the price may initially face the recent support of 1.2121. A violation of that floor could pave the way for the seven-month bottom of 1.2036. Failing to halt there, the pair could descend towards the March low of 1.1800.

Alternatively, if the bulls re-emerge and push the price higher, the pair could ascend towards the recent rejection region of 1.2336. Breaking above that zone, the pair could test the December-January resistance zone of 1.2445, which coincides with both the 50- and 200-day simple moving averages (SMAs). Further advances might then cease at the April resistance of 1.2547 that also acted as support in August.

In brief, GBPUSD attempted to halt its relentless decline, but its rebound quickly faltered. Can the bulls strike back?

Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.

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