GBPUSD flirts with 20-day SMA, suggesting more losses

GBPUSD is currently positioned within the 20- and 40-day simple moving averages (SMAs), which are pointing upwards. The current bias appears negative, as the MACD is holding below the zero level, while the RSI is sloping down in the negative territory.

Should weakness extend below the 1.2455 mark, support to downside movements could initially be detected within the 1.2070-1.2150 area, which encapsulates the two-year low. Clearing that zone, the next stop could be around 1.1420, a tested level since March 2020.

Alternatively, the pair needs to overcome the 40-day SMA and the 1.2670 top to meet a key barrier between the 1.2850 resistance. The 1.2970 barrier could act as a resistance too before a more important battle starts near 1.3165 and the 200-day SMA around the 1.3300 psychological level.

In the medium-term picture, the sentiment remains bearish, and only a successful increase beyond the 200-day SMA may switch the current outlook to positive.

All in all, GBPUSD currently maintains a bearish mode both in the short and the medium-term timeframes. 

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).

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