The British pound found itself under significant pressure Thursday against the US dollar, largely connected to deterioration in global sentiment stemming from coronavirus concerns. Bolstered by a pullback in the US dollar index, however, 1.25, based on the H4 timeframe, maintained position, offering GBP/USD some much-needed respite. As of writing, bulls are seen firming modestly north of 1.26, with the relative strength index showing little signs of recovery off 19.00, deep within oversold terrain.
Technical support on the daily timeframe held at 1.2524, strengthened on the back of confluence stemming from the 61.8% Fibonacci retracement ratio at 1.2527. Yesterday’s decline also dethroned the 200-day SMA (orange – 1.2703), as well as support at 1.2769, both now likely to represent resistance going forward.
Weekly price punished the 2019 yearly opening level at 1.2739 amidst recent selling, perhaps unlocking the door to further losses towards support coming in at 1.2369.
1.26 holding as support may be on the radar for some traders today, though upside attempts could be limited by 1.2739: the 2019 yearly opening level on the weekly timeframe.
Downside south of 1.26 is an alternative direction today; however, with daily buyers making a show off support at 1.2542, further recovery may be favoured.
Disclaimer: The information contained in this material is intended for general advice only.