GBPUSD appears vulnerable to test multi-month-old support line
GBPUSD remains pressured at the lowest level in seven months, reversing the previous week’s corrective bounce, as the Cable traders await final prints of the UK S&P Global/CIPS PMIs for September. It’s worth noting that a clear downside break of an eight-month-old horizontal support zone joins the bearish MACD signals to keep the Pound Sterling bears hopeful. However, the oversold RSI (14) line and 50% Fibonacci retracement of October 2022 to July 2023 upside, near 1.2040, restricts the immediate downside of the pair. Following that, the 1.2000 psychological magnet and an ascending support line from November, close to 1.1890 by the press time, will entertain the bears. In a case where the quote remains bearish past 1.1890, the 61.8% Fibonacci ratio of around 1.1780 will be the last defense of the buyers.
On the contrary, the previous weekly low of around 1.2110 restricts the nearby downside of the GBPUSD pair ahead of the 10-SMA level surrounding 1.2170. More importantly, the support-turned-resistance area comprising multiple levels marked since February, near 1.2310–2270, appears a tough nut to crack for the Cable pair buyers to cross past 1.2170. Should the Pound Sterling remain firmer past 1.2170, a three-month-long descending resistance line surrounding 1.2470 will be crucial for the bulls to cross before retaking control.
Overall, GBPUSD is likely to remain bearish even as the downside room appears limited.
