GBPUSD is approaching the five-month low of 1.2200 once again, continuing the steeper declines that started after the penetration of the downward sloping channel on March 12.
The risk is still to the downside as the technical indicators are facing negative momentum the bearish areas. The RSI is flattening just below the 30 level, while the MACD oscillator is extending its movement beneath its trigger line, suggesting more losses in the near term.
Should cable tumble below the strong 1.2200 psychological level, it could reach the 1.2015 support, registered on August 2019. Slightly below this barrier, the 35-month trough of 1.1957 could attract traders’ attention before plunging to further multi-year lows.
Alternatively, if the pair posts some gains, the next resistance could come from the 23.6% Fibonacci retracement level of the downward wave from 1.3515 to 1.2200 at 1.2510. Above this line, the 1.2700 handle, being the 38.2% Fibonacci and the 1.2725 hurdle, taken from the inside swing low on February 27 could come next. Clearing this level, the 20-day simple moving average (SMA) at 1.2770 could halt upside movements.
To sum up, GBPUSD has been in an aggressive downfall over the last week, shifting the neutral-to bearish sentiment to strongly negative in the short-term. However, in the long-term timeframe, the price has been moving sideways since 2018.
