GBPUSD has paused its bearish phase and is making a corrective move after rebounding ahead of the key 1.3000 psychological level. Risks are still tilted to the downside and further weakness is expected since momentum signals are bearish.
MACD is sloping down which highlights the potential for another leg lower in GBPUSD. RSI is in bearish territory below 50 although the decline has stalled, which suggests the market could enter a consolidation phase or bounce higher.
Immediate resistance is expected at 1.3216, which is the 50% Fibonacci retracement level of the upleg from 1.2773 to 1.3656. Above this, further resistance can be found at 1.3318 and 1.3448 before the September 20 peak at 1.3656, the highest since June 2016.
GBPUSD is currently finding support at the 50-day moving average at 1.3131. Breaking below this would turn the focus back to the downside to target the key 1.3000 area. An extension lower would bring the August 24 low at 1.2773 into view.
The short-term bearish bias is still in progress. Only a move back above 1.3200 would indicate that the short-term bearish phase from 1.3656 has ended.
