GBPUSD remains under negative pressure as it declined below the 23.6% Fibonacci retracement level of the downleg from 1.4375 to 1.2660, around 1.3065. Momentum indicators, signal that the market holds in a consolidation mode in the short-term as the RSI indicator is flattening below its threshold of 50, while the MACD oscillator stands below the trigger and zero lines with weak movement.
A bounce up could see immediate resistance at the 20-day simple moving average (SMA), which hovers near the 1.2900 handle, while even higher the 40-day SMA around 1.2985 could act as major resistance as well. Slightly higher, the 23.6% Fibonacci could be the next level to have in focus, while if this fails to hold, bullish actions may then try to overcome the previous peak and touch the 1.3170 resistance.
On the flipside, the focus will shift to the immediate support area between the 14-month low of 1.2660 and the 1.2690 level. Further declines may open the way towards 1.2580 where the price registered significant rebound on June 2017.
Having a look at the longer picture, GBPUSD retains the neutral outlook over the past four months, ranging between 1.2690 and 1.3255. Any penetration of this regions would adjust the market sentiment accordingly; a close above 1.3255 would bring a more bullish view back into play, however a daily closing candle below 1.2690 would resume the bearish phase.
