Technical Analysis – GBPUSD hits one-month low after BoE
August 3, 2023 2:25 pm
GBPUSD slumped below 1.2700 on renewed selling pressure on Thursday after failing to climb back above the broken support trendline from October 2022 at 1.2740.
The Bank of England’s policy announcement during today’s session added more pressure on the market, sending the price as low as 1.2619. Despite that, the pair recouped a sizeable portion of its earlier losses and stood again around the 1.2665 level and the lower boundary of the bearish channel.
The RSI and the stochastic oscillator are hinting at oversold conditions in the four-hour chart, increasing hopes that the latest downleg could soon halt. Yet, the path higher could be rocky.
The 1.2740 barrier and the falling 20-period simple moving average (SMA) could reject any increases towards the 50- and 200-period SMAs at 1.2825. Then, a decisive close above the bearish channel at 1.2875 and the ascending line from June at 1.2900 could be a bigger challenge.
Alternatively, a drop below the channel and the 1.2665 threshold could retest today’s low of 1.2619 or even revisit the nearby constraining area of 1.2590-1.2540. If sellers push lower, the 1.2485 barricade could next come to the rescue, preventing a continuation towards the 1.2400 round level.
In brief, GBPUSD has almost erased July’s bull race and it could suffer more pain in the near term if it exits the bearish channel to the downside and below 1.2665.
GBPUSD slumped below 1.2700 on renewed selling pressure on Thursday after failing to climb back above the broken support trendline from October 2022 at 1.2740.
The Bank of England’s policy announcement during today’s session added more pressure on the market, sending the price as low as 1.2619. Despite that, the pair recouped a sizeable portion of its earlier losses and stood again around the 1.2665 level and the lower boundary of the bearish channel.
The RSI and the stochastic oscillator are hinting at oversold conditions in the four-hour chart, increasing hopes that the latest downleg could soon halt. Yet, the path higher could be rocky.
The 1.2740 barrier and the falling 20-period simple moving average (SMA) could reject any increases towards the 50- and 200-period SMAs at 1.2825. Then, a decisive close above the bearish channel at 1.2875 and the ascending line from June at 1.2900 could be a bigger challenge.
Alternatively, a drop below the channel and the 1.2665 threshold could retest today’s low of 1.2619 or even revisit the nearby constraining area of 1.2590-1.2540. If sellers push lower, the 1.2485 barricade could next come to the rescue, preventing a continuation towards the 1.2400 round level.
In brief, GBPUSD has almost erased July’s bull race and it could suffer more pain in the near term if it exits the bearish channel to the downside and below 1.2665.
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