The Pound Sterling sellers extended control following a subdued week, as the United States Dollar (USD) gathered steam on hawkish US Federal Reserve (Fed) rate hike expectations. Attention now turns toward the US Federal Reserve Minutes and Preliminary Global PMI data for fresh trading impetus in the GBP/USD pair.

The ongoing recovery in the United States Dollar from ten-month troughs gathered traction for the third consecutive week, smashing the Pound Sterling bulls. As a result, the GBP/USD pair lost over 100 pips, unable to sustain the early recovery rally to near 1.2270 levels.

Having confirmed a symmetrical triangle breakdown on the daily chart on Wednesday, the GBP/USD pair extended the downtrend to breach the flattish 200-daily moving average (DMA) at 1.1939.

A weekly closing below the critical 200 DMA support is likely to reinforce sellers, as they seek acceptance below the bullish 100 DMA at 1.1900. A sharp sell-off toward the yearly low of 1.1841 could be in the offing if the 100 DMA caves in.

Additional declines could encounter static support around the 1.1770 region. The 14-day Relative Strength Index (RSI) is falling further toward the oversold territory, suggesting that there is more room for the downside.

Alternatively, GBP/USD needs to regain the triangle support now turned resistance at 1.2007 to initiate any meaningful recovery toward the 1.2100 round figure. The next critical upside hurdle lurks at 1.2171, the slightly bearish 50 DMA.

GBPUSD can continue for its 5th wave on weekly cycle

Feb 19 2023