The GBPUSD pair is currently facing downward pressure, as it approaches a recent low near the 1.2603 level. This downward move has resulted in the pair slipping below the 200-hour moving average, which stands at 1.26212. Maintaining a position below this average could further empower sellers.
However, there’s a notable support zone between 1.2589 and 1.2602. A decisive break below this range could intensify the bearish sentiment. If this occurs, the next key target for traders would be the 38.2% retracement of the November trading range, located at 1.25240. This level is particularly significant following the pronounced trend observed in November; breaching this retracement is crucial for confirming the sellers’ dominance.
Further bearish momentum could bring the focus to the converging 100 and 200-day moving averages around 1.2475. Conversely, if the support zone between 1.2589 and 1.2602 holds, and the price rebounds above the 200-hour moving average at 1.26212, it could provide reassurance to buyers that a short-term low may have been established. In this scenario, the next upside target would be the 100-hour moving average at 1.26714, offering a potential reversal point for the currency pair.
This article was written by Greg Michalowski at www.forexlive.com. Source