GBPUSD refreshed a 16-month low on Friday amid broad US dollar strength, as well as preparations for this week’s key monetary policy meetings of the Bank of England (BOE) and the US Federal Reserve (Fed). With that, the cable pair also broke 2021 bottom and 61.8% Fibonacci Expansion (FE) of June 2021 to January 2022 moves, respectively around 1.3160 and 1.3070. As a result, a downside break of the 1.3000 psychological magnet becomes imminent. However, a descending trend line from April 2021, around 1.2950, may challenge the pair sellers afterward. In a case where the pair prices remain weak past 1.2950, the 78.6% FE level near 1.2885 and November 2020 bottom surrounding 1.2850 will be in focus.
On the contrary, the corrective pullback may aim for the 61.8% FE and 2021 bottom, close to 1.3070 and 1.3160. Though, a convergence of the 10-DMA and a three-week-old descending resistance line, around 1.3220-25, will challenge the GBPUSD pair’s further upside. In a case where the quote rises past 1.3225, recovery moves will target January’s low near 1.3360.
Overall, GBPUSD broke the key support levels during the last week and hence hints at the further downside. However, oversold RSI and cautious mood ahead of the BOE and Fed decisions may trouble the bears.