GBPUSD has been in a descending channel over the last three months as the 1.3200 handle seems to be a real struggle for the bulls. During yesterday’ session the pair posted an upside spike towards the upper boundary of the Ichimoku cloud and the channel but failed to exit the range.
Technically, the price could lose some ground in the short-term as the RSI is changing direction to the downside and towards its 50 neutral mark, while the stochastics are warning over an overbought market, creating a bearish cross within the %K and %D lines.
The failure to overcome the 1.3200 barrier could send the price down to the 40-day simple moving average (SMA) currently at 1.2985 before challenging the 38.2% Fibonacci retracement level of the down leg from 1.3515 to 1.2725 at 1.2920. Lower, support could be next found around the 50.0% Fibonacci of 1.2735 and the four-month low of 1.2725, while a decisive close below this could trigger a steeper sell-off, shifting the slightly bearish outlook to strongly negative.
Alternatively, a jump above the upper surface of the cloud could take the price towards the 1.3210 resistance and the 1.3285 level. Higher, the 14-month peak of 1.3515 could be a crucial region for traders.
In the medium-term picture, GBPUSD is gently pointing down, framing a negative profile. A strong run below 1.2725 would extend the downward pattern off 1.3515, making the outlook even more bearish.
