Dives beyond 200-MA and key dips
GBPUSD slipped below the 200-day Simple Moving Average (SMA) at 1.3707 and the March and April lows at 1.3669, reinforcing a bearish notion as it gives up further ground. The declining 50 and 100 day SMAs give the impression that bearish forces are taking the lead.
Ichimoku lines indicate that downside risks persist, while short-term oscillators suggest the pair may stay heavy for a bit longer. The MACD below zero has moved back below its red trigger line, while the RSI is approaching 30 levels. In addition, the negatively charged stochastic oscillator endorses the reign of bears.
If the sellers manage to extend the bearish path, the initial deterrent to the descent could come from the 1.3450-1.3564 support area formed between the February 4 and January 11 lows. If this critical barricade fails to stop the increasing negative trends, then the price may sink to test the 1.3303 obstacles ahead of the 1.3186 troughs.
If the buyers can find their feet and successfully resist the accelerating downward pressures, they should initially move back above the 1.3669 level (former support-now-resistance) and the Nearby 200-day SMA at 1.3707. Pushing higher, the Tenkan-sen red line at 1.3770 and the nearby 1.3800 handles could try to undo the pair’s efforts to improve. Nonetheless, a more difficult resistance hurdle remains if the buyers persist which is an area from the Kijun-sen blue line at 1.3890 up to 1.4000.
In summary, for the GBPUSD’s recently adopted bearish roll to remain active, the price would need to persist below the SMAs and lows of 1.3669. Still, to raise buyer confidence, the price would have to move back above the SMAs and the Ichimoku cloud.