GBPUSD came under renewed bearish pressure and dropped below 1.1800 on Thursday. While presenting the budget, UK Chancellor Hunt unveiled £55 billion in tax hikes and spending cuts. Meanwhile, the US Dollar gathers strength amid risk aversion.

GBPUSD trades within the ascending regression channel coming from November 3. As long as the lower limit of that channel, which is currently located at 1.1900, stays intact, buyers are likely to remain interested. On the upside, 1.1950 (static level) aligns as interim resistance before the pair could target 1.2000 (psychological level) and 1.2030 (November 15 high).

With a four-hour close below 1.1900, additional losses toward 1.1850 (20-period Simple Moving Average (SMA) on the four-hour chart) and 1.1800 (psychological level, static level) could be witnessed.

The pound needs to post a daily close above that could open the doors for a recovery of 1.20 and more. The next critical target is the 200-day Simple Moving Average at 1.2240.

If the ongoing correction extends, the area around 1.1740 emerges as a strong support that should favor a rebound. The following support is seen at 1.1640. A slide below would target the 20-day SMA at 1.1560.

These data are unlikely to influence the market pricing of the next Federal Reserve rate decision in a significant way. Hence, investors will keep a close eye on Wall Street. If risk flows start to dominate the financial markets in the American session, the US Dollar (USD) could continue to weaken and open the door for another leg higher in GBPUSD.

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