GBPUSD has been gradually tumbling over the last couple of weeks, dropping to levels not seen in several decades. The price is flirting with the fresh low last seen in 1985 that posted on Wednesday at 1.1450.
The sharp selling interest was confirmed by the long-term momentum indicators that slipped in their negative territories. The RSI is hovering near the 30 level, while the MACD is falling beneath its trigger line in the weekly timeframe. The Ichimoku lines are dropping as well, following the price action.
Should the market extend its losses, immediate support would come from the 35-year trough of 1.1450, before continuing the free fall towards the 161.8% Fibonacci extension level of the latest upward wave from 1.1980 to 1.3525 at the 1.1000 strong psychological level. Note that round numbers before 1.1000 could attract traders’ attention as well.
If the price recoups some of its losses and rebounds on the multi-year low, it could meet the 1.1980 resistance, taken from the low on September 2019. Above that, the 1.2180 barrier could come into focus ahead of the Ichimoku cloud around 1.2400. Higher still, the 50-week simple moving average (SMA) currently at 1.2710 and the 23.6% Fibonacci retracement level of the down leg from 1.7180 to 1.1450 could halt upside movements.
In conclusion, the sharp sell-off drove GBPUSD to a new multi-year bottom, turning the outlook to strongly bearish in the long-term timeframe.
