GBPUSD has been experiencing losses for the fourth trading day in a row, falling to a more than two-week low.
The RSI indicator is currently in bearish territory at 47, indicating near-term bearish sentiment. Note though that this is close to the 50 neutral level.
If the price closes above the 50-day moving average, the area around 1.25, which managed to hold several times recently, is likely to act as resistance to upside moves. Should it be breached, the February 2 near eight-week high of 1.2705 would come into scope as another resistance level (note that 1.27 could act as a psychological level as well). Only if prices break above the December 6 four-month high of 1.2774 we would be able to talk about a reversal in sentiment for the pair.
On the downside, a congested area around 1.2285 comes into view as immediate support. If it is challenged and fails to hold, the area around 1.22 would likely offer additional support. This has been a congested area as well. A further fall would shift focus to the mid-January thirty-two-year low of 1.1986.
Looking at the medium-term, the price since the latter part of January has been above the 50-day MA but significantly below the 200-day one, setting a bearish medium-term outlook. It should be noted though that should the price further drift away from the 200-day MA, it could be an indication of an overextended selloff.
Overall, the near- and medium-term bias is bearish.
Origin: XM
