GBPUSD completed three green trading days in a row, while during today’s European session is moving marginally lower. The price is capped by the 20 and 40 simple moving averages in the daily timeframe, but it jumped above the 23.6% Fibonacci retracement level at 1.3810 of the upleg with the low of 1.2120 and the high of 1.4345.
Having a look on the short-term indicators, the bearish correction remains in focus as both are endorsing the downside movement. The MACD oscillator is falling below the trigger and zero lines, while the RSI indicator is pointing south in the negative zone. It is worth mentioning that the 20-SMA is recording a bearish cross with the 40-SMA, suggesting further decline.
If price continues the downside retracement and extends its losses below the 23.6% Fibonacci mark, it could open the door for the 1.3660 – 1.3710 support area. If there is a fall below the latter level, there would be scope to test the next immediate support of 38.2% Fibonacci level slightly above the 1.3450 barrier.
Conversely, if cable penetrates to the upside the aforementioned bearish cross within the simple moving averages, it could then move towards the 1.4150 resistance level, taken from the peak on February 16. A break above this area could take the price towards the 1.4280 resistance barrier.
Looking at the bigger picture, the cable has been developing within an ascending move over the last year, hitting the uptrend line several times in the previous months.