GBPUSD started the week in negative territory and slipped below the 50.0% Fibonacci retracement level of the upleg from 1.2100 to 1.4375, around 1.3180. The price has been extending its bearish bias after the touch on the 1.4375 resistance on April 17. Since then, the cable continues the downward movement, shifting the bullish outlook to bearish.
Short-term momentum indicators are holding below their neutral levels. The MACD oscillator stands near its red-trigger line with weak momentum, while the Relative Strength Index (RSI) lies below the threshold of 50 and is flattening. Moreover, the price action stands below the 20- and 40-simple moving averages (SMAs), suggesting further losses.
Should prices head lower, immediate support could some at the 1.3040 taken from the latest lows. A drop below this area would take the pair closer to the 61.8% Fibonacci near the 1.2900 psychological level, which acts as major support.
On the flip side, there is immediate resistance just above the current market price, the 50.0% Fibonacci. A significant leg above this hurdle would drive the price until the 20- and then the 40-SMAs at 1.3260 and 1.3335 respectively. A breach of these levels would hit the 38.2% Fibonacci near 1.3475.
Overall, GBPUSD has been developing within a downtrend since April 17 started an aggressive bearish rollercoaster. The medium-term picture remains negative as the price is still moving below the moving averages.
