GBPUSD has significantly moved away from 10-month highs hit earlier in the month as it continues its downslide, dropping below the key 1.29 level. It is now attempting to reclaim that level after finding support at the 61.8% Fibonacci retracement level of the upleg from 1.2588 to 1.3266 between June and August.
Technical indicators continue to remain in bearish territory. The RSI is trending down again after failing to break above 50, while the MACD remains well below 0, though it has now climbed above the red signal line, suggesting an easing of the bearish bias in the near term.
The 1.2908 level proved a strong resistance area both today and yesterday and will likely again act as resistance in any upside moves. The next barrier could come from the 50% Fibonacci level at 1.2925. Above that, the 50-period moving average (MA), currently at 1.2967, would be one to watch as a break above the 50-period MA would shift the short-term bias to a bullish one. Further up, the 1.30 handle is a major resistance point as this has not only been a congested area in the past but also coincides with the 38.2% Fibonacci level, as well as the 200-period MA.
To the downside, the 61.8% Fibonacci level should again provide support at around the 1.2845 mark. Steeper declines would see the pair testing the July low of 1.2810, followed by the 78.6% Fibonacci level at 1.2730. A drop below this level would open the way towards the 1.26 handle and the June low of 1.2588.
Looking at the medium-term picture, the pair is looking increasingly neutral as it has slipped just below the 50-day moving average in the daily chart (though remains above the 200-day moving average).
