GBPUSD breached the 1.2381 swing low, causing a steeper downfall towards the 138.2% Fibonacci extension of 1.2026 of the up leg from 1.2393 to 1.3381.
The relatively flat momentum indicators support a very short-term breather. The MACD has flattened below its red trigger line, whereas the RSI is hovering on the 30-level of the oversold area. Despite the short-term pause view, the negatively-sloped simple moving averages (SMAs) indicate that the trend is likely to remain on the downside.
If the bears can push below the 138.2% Fibo extension of 1.2026 and more importantly the 1.2000 psychological number, the focus would turn to the 1.1987 support from January 2017. If breached, the way would open towards 1.1794, which is the 161.8% Fibo level.
If positive interest picks up, with the price jumping above the 1.2210 swing high, the mid Bollinger band around 1.2270 could provide some interference before the 1.2380 resistance can be tested. Climbing higher the bulls could stall at 1.2475 where the 50-day SMA also lies. If the bulls persist and a fracture of the 1.2590 swing high unfolds, this could raise gains to 1.2780.
Summarizing, GBPUSD bears could dominate in the short-term, while in the medium-term the outlook remains negative as well, unless the market stages a strong rally above 1.2865.