GBPUSD is struggling to hold above the 1.2900 level and its previous low, having cracked below the Ichimoku cloud, with the bearish cross between the 20- and 50-day simple moving averages (SMA) adding concerns of a down-trending market.
In the short-term, the bears could remain active according to the RSI, which remains below its 50 neutral mark, while the strengthening negative momentum in the MACD is another sign that the pair may keep facing downside pressure.
For the sell-off to continue, sellers should clear the nearby support of 1.2870 which is the 38.2% Fibonacci of the long downleg from 1.4375 to 1.1957. If efforts prove successful, the price could weaken until a former restrictive area of 1.2780 before testing the 200-day SMA currently around 1.2700.
Alternatively, if the market manages to close above 1.2900, the next stop could be somewhere between the 1.3000 level and the 20- and 50-day SMAs. Moving higher, the bullish action could stall within the 1.3163-1.3218 resistance region which includes the 50% Fibonacci, while above it another key barrier is expected to pop up around 1.3280.
Meanwhile in the medium-term window, the neutral outlook is still intact as long as the price keeps fluctuating between 1.2780 and 1.3280.
In brief, GBPUSD is expected to face further weakness in the short-term, while in the medium-term picture, the sentiment could switch to negative if there’s a drop below 1.2780.
