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GBP/USD Vulnerable as Bearish Price Series Persists

Article By: ,  Strategist
October 23, 2024 8:18 PM

British Pound Forecast: GBP/USD

GBP/USD extends the decline from the start of the month after failing to defend the September low (1.3002), and the exchange rate may continue to give back the advance from the August low (1.2665) as it no longer tracks the positive slope in the 50-Day SMA (1.3141).

GBP/USD Vulnerable as Bearish Price Series Persists

GBP/USD registers a fresh monthly low (1.2907) as it continues to carve a series of lower highs and lows, with the weakness in the exchange pushing the Relative Strength Index (RSI) to its lowest level since April.

 

In turn, a move below 30 in the RSI is likely to be accompanied by a further decline in GBP/USD like the price action from earlier this year, but the oscillator may show the bearish momentum abating if it holds above oversold territory.

With that said, GBP/USD may reestablish the bullish trend from earlier this year should it find support ahead of the August low (1.2665), but recent price action raises the scope for a further decline in the exchange rate as it continues to reflect a bearish series.

GBP/USD Price Chart –Daily

Chart Prepared by David Song, Strategist; GBP/USD on TradingView

  • The decline from the start of the week may persist as GBP/USD carves a series of lower highs and lows, with a break/close below the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) region bringing 1.2820 (38.2% Fibonacci extension) on the radar.
  • Next area of interest comes in around 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) but GBP/USD may reestablish the bullish trend from earlier this year should it hold above the August low (1.2665).
  • Need a break/close above 1.3000 (61.8% Fibonacci extension) for GBP/USD to threaten the bearish price series, with a breach above the 1.3140 (78.6% Fibonacci extension) to 1.3150 (23.6% Fibonacci extension) area opening up1.3210 (50% Fibonacci extension).

Additional Market Outlooks

US Dollar Forecast: USD/JPY Rally Triggers Overbought RSI Signal

US Dollar Forecast: AUD/USD Falls Toward September Low

Gold Price Breakout Pushes RSI into Overbought Zone

US Dollar Forecast: USD/JPY Vulnerable on Failure to Test August High

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

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