September 23, 2022 12:57 AM ET
By: AnalysisWatch
The GBP/USD pair broke the consolidation formed in a narrow range between 1.1250 and 1.1275 to the downside in the Tokyo session. The asset is bearish after hitting hurdles around 1.1350 on Thursday. Cable is expected to retest the new multi-decade low at 1.1211, and then the auction structure will decide the fate of the asset.
On the hourly scale, the asset is declining towards 1.1211 after falling below 1.1250. The horizontal resistance emanating from the September 16 low at 1.1351 has proven to be an important barrier for the pound bulls. The downward trend line emanating from the September 13 high at 1.1738 is also preventing the pound bulls from turning higher.
The falling 50-period Exponential Moving Average (EMA) at 1.1290 suggests further weakness.
A look at the Relative Strength Index (RSI) (14) shows that the Momentum Oscillator has found resistance at 60.00 and is now on the verge of moving into the bearish 20.00-40.00 range. If this is the case, the pound will weaken further.
After giving up the new multi-decade low at 1.1211, the cable will fall towards the February 4, 1985 high at 1.1160, followed by the round support at 1.1100.
Alternatively, pound bulls could regain strength and drive the cable towards Tuesday's high at 1.1461 and psychological resistance at 1.1500 if the asset manages to break out above Thursday's high at 1.1363.
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