Key Highlights
· The British pound started a downside move from 1.3280 and declined towards 1.3000 against the US dollar.
· There is a declining channel formed with resistance at 1.3100 on the 4-hours chart of GBP/USD.
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GBP/USD Technical Analysis
Looking at the 4-hours chart, the pair faced an increased selling pressure from the intermediate high at 1.3217. It fell sharply and settled below the 1.3080 support and the 100 simple moving average (red, 4-hours).
The pair tested the 1.3000 support and it is currently consolidating losses. It recently corrected above the 23.6% Fib retracement level of the recent decline from the 1.3217 high to 1.3000 swing low.
However, the pair failed to settle above the 100 SMA and the 50% Fib retracement level of the recent decline from the 1.3217 high to 1.3000 swing low. More importantly, there is a declining channel formed with resistance at 1.3100 on the same chart.
If the pair gains traction and breaks the channel resistance, there could be a correction towards the 1.3150 level in the near term.
On the other hand, a downside break below the 1.3000 support may push the price towards the 1.2975 level and the 200 SMA (green, 4-hours). Below the 200 SMA, GBP/USD could even trade towards the 1.2840 support area.
