GBPUSD renews a 5.5-month low while extending the previous week’s downside break of the 200-day SMA, as well as drilling the 61.8% Fibonacci retracement of March-July upside. In doing so, the Cable pair ignores the oversold RSI (14) line while taking clues from the bearish MACD signals, which in turn suggests limited downside room for the Pound Sterling. As a result, a horizontal support zone comprising multiple levels marked since early February, around 1.2200, will be the key to watch during the quote’s further downside. In a case where the pair declines below 1.2200, the 78.6% Fibonacci retracement and February’s low, respectively near 1.2090 and 1.1800 will be in the spotlight. That said, the 1.2000 psychological magnet may offer intermediate stops during the pair’s fall towards the 1.1800.
On the contrary, a daily closing beyond the 200-day level of around 1.2435 becomes necessary for the intraday buyer’s turn. Even so, the 50% Fibonacci retracement and a downward-sloping resistance line from July, close to 1.2480 and 1.2570 in that order, will be tough nuts to crack for the GBPUSD buyers before retaking control. Should the Pound Sterling remain firmer past 1.2570, May’s peak of around 1.2680 will act as the final defense of the Cable bears.
Overall, GBPUSD is likely to remain bearish, unless the Bank of England (BoE) surprises, even as the downside room appears limited.