GBP/USD is under pressure below 1.3700, trying to find its feet after Friday’s severe blow. The bears retain control amid a broadly stronger US dollar and looming Brexit risks. Brexit concerns intensify amid UK-French fishing row. US ISM Manufacturing PMI awaited. The GBP/USD broke the channel up pattern at mid-day on Friday. The event resulted in a sharp decline to the 1.3670 level. Afterwards, a short lived recovery found resistance in the 1.3700 mark. By the middle of Monday's European trading hours, the pair had reached the 1.3650 level. In the case that the decline passes the support of the 1.3650 mark, the rate might look for support in the weekly S1 simple pivot point at 1.3628. Below the S1 the weekly S2 simple pivot point at 1.3567 could slow down a decline.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

GBP/USD broke below the key support at 1.3680, where the 200-period SMA on the four-hour chart and the Fibonacci 38.2% retracement of the latest uptrend is located. Currently, the Relative Strength Index (RSI) indicator on the daily chart is staying near 30, suggesting that the pair could stage a technical correction before the next leg down. In case, 1.3680 turns into resistance, additional losses could be witnessed in the near term.

On the downside, the next support is located at 1.3630 (Fibonacci 50% retracement) ahead of 1.3600 (psychological level) and 1.3570 (Fibonacci 61.8% retracement).

In case buyers manage to lift the price back above 1.3680 and hold it there, 1.3720 (100-period SMA) could be seen as technical resistance before 1.3740 (Fibonacci 23.6% retracement).

GBPUSD Entered The Bearish Channel

Nov 01 2021