GBPUSD continued its short consolidation phase marginally below the 20-day simple moving average (SMA), as it was unable to close decisively above the 1.3600 level over the past week.
The 23.6% Fibonacci retracement of the 1.4248 – 1.3411 downtrend is currently keeping the bulls under control around 1.3608 as the technical picture is providing little hope for a change in the downbeat market sentiment. Despite the quick rebound off the 30 oversold level, the RSI remains stuck below its 50 neutral mark, while the Stochastics have clearly shifted southwards. Likewise, the negative intersections between the shorter- and longer-term SMAs keep promoting the bearish trend from the top of 1.4248.
Traders may remain on the sidelines unless the price motivates fresh selling below 1.3540, shifting all the attention towards the new 2020 low of 1.3411. Moving lower, the decline could next take a breather around the 1.3280 barrier, which has been acting both as support and resistance at the end of 2020. If this fails to hold too, it would be interesting to see if the 1.3163 area, which encapsulates the 38.2% Fibonacci of the 2020-2021 upleg can come to the rescue.
Otherwise, a sustainable move above the 20-day SMA at 1.3626 may see a test near the 50-day SMA and the 38.2% Fibonacci of 1.3730. However, a more challenging obstacle is placed between the tentative descending trendline and the 200-day SMA at 1.3840. Note that the 50% Fibonacci is also located within these boundaries. Hence, any step higher from here may switch the focus towards the 61.8% Fibonacci of 1.3982, unless the 1.3912 bar stands tall once again.
Summarizing, the short-term risk is still tilted to the downside for GBPUSD, but traders may wait for a close below 1.3540 before they engage in more selling.
