GBPUSD has erased last week’s gains, which barely touched the 1.3500 level, bringing its 2021 low of 1.3352 back into scope.
There is speculation for additional bearish sessions in the short term given the negative slope in the RSI, and the falling red Tenkan-sen line, which has been a key barrier to upside movements over the past three weeks. On the bright side, the MACD has reached its former support region, raising the odds for a potential reversal in the price, though as long as it holds below its red signal line, the base scenario is for the pair to continue lower.
A step below 1.3352 could immediately pause around the 1.3300 number, while within breathing distance, the supportive line, which joins all the lows from the end of July, could cement that floor, preventing any deterioration towards the 1.3200 mark.
Alternatively, for the bulls to re-enter the game in the near term, the price will need to close above the red Tenkan-sen line at 1.3432. If that is the case, the spotlight will turn to the 20-day simple moving average SMA) currently around the swing high of 1.3512. Crossing above that border, the 23.6% Fibonacci retracement of the 1.4248 – 1.3352 downleg at 1.3563 and the 50-day SMA at 1.3600 could be the next hurdles before a crucial battle starts around the resistance trendline and the 38.2% Fibonacci of 1.3694. Note that a decisive close above that area is required to brighten the outlook in the big picture.
Summarizing, negative risks are still evident in GBPUSD. A forceful move above 1.3432 could improve market sentiment, while a drop below 1.3352 could motivate fresh selling.