Downside risks dominated the GBP/USD exchange rate on Wednesday. The failure to surpass the 55-hour SMA early in the session was followed by a decline in price.
This bearish momentum was strengthened mid-session in response to solid US GDP data. The market reaction to this fundamental release was limited 40 pips.
A southern breakout of the 200-hour SMA, the monthly R1 and the weekly PP could point to further decline within this session. Downward potential is until the 1.40 mark.
Conversely, oversold technical indicators suggest the opposite. This bullish scenario is likewise reinforced by the fact that the Pound has reached the bottom boundary of a four-week channel circa 1.4090. In case the 1.41 area is breached, the pair is likely to struggle near the 55– and 100-hour SMAs at 1.4150.
