- GBP/USD struggles to rebound from seven week low.
- Downbeat RSI, not oversold, joins sustained break of key trend line, SMA to favor sellers.
- Bulls need fresh monthly high for conviction, 100-day SMA, nine-month-old support line lure bears.
Following its failures to recover from early-February lows, GBP/USD holds lower ground near 1.3690 during Thursday’s Asian session. The cable dropped to the multi-day low the previous day while extending the early week breakdown of 50-day SMA and an ascending support line from January 11, 2021.
Given the downward sloping RSI having a gap to the south before hitting the oversold alarm, the GBP/USD prices suggest further downside.
Hence 100-day SMA level of 1.3622 gains the short-term sellers’ attention ahead of an upward sloping trend line from June 29, 2020, at 1.3551.
It should, however, be noted that the quote’s sustained trading below 1.3550 seems less likely as the RSI might have turned oversold by then and the same can trigger corrective pullback of the quote.
Meanwhile, GBP/USD recovery moves should initially cross the immediate resistance line, previous support near 1.3800 threshold, before confronting the 50-day SMA level of 1.3828.
If at all the sterling buyers manage to cross the 1.3830 hurdle, a monthly top surrounding 1.4020 will be the key to watch.
GBP/USD DAILY CHART