GBP/USD Could Recover From Oversold Conditions

Key Highlights

  • The British pound declined sharply during the past few days and broke the 1.3700 support against the US dollar.
  • There is a key bearish trend line forming with resistance at 1.3650 on the 4-hour chart of GBP/USD.

GBP/USD Technical Analysis

The British pound faced a lot of selling pressure recently and declined below the 1.3700 support against the US dollar. The GBP/USD pair even traded a few pips below the 1.3500 support and is currently correcting higher.

Looking at the 4-hours chart, the pair is trading well below the 100 (red) and 200 (green) simple moving averages. It traded as low at 1.3483 and is currently consolidating losses. On the upside, an initial resistance is near the 38.2% Fib retracement level of the last drop from the 1.3792 high to 1.3483 low.

Moreover, there is a key bearish trend line forming with resistance at 1.3650 on the 4-hour chart of GBP/USD. Therefore, if the pair corrects higher, it could face sellers near the 1.3600 and 1.3650 resistance levels.

GBP/USD H4 Chart

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