GBP/USD: Downside Move Unsurprising
GBP/USD initially rose following the announcement to increase the Bank Rate, though it failed to find acceptance north of the $1.26 level. Subsequent flow witnessed a one-sided decline unfold to $1.25 during US trading.
The recent bout of selling should not have raised too many eyebrows, particularly for those who adopt a multi-timeframe technical approach. The weekly timeframe, albeit showing the currency pair closing higher for eight consecutive weeks, reveals price action crossed swords with a major long-term weekly trendline resistance taken from the high of $1.4250. Sellers have clearly put in an appearance from here, swinging weekly support at $1.1851 back into view.
Aiding the weekly timeframe’s resistance, I see resistance also made its way into the frame between $1.2767 and $1.2638, consisting of weekly resistance and daily resistance levels. This has thrown light back on daily support coming in at $1.2272 and also pulled the Relative Strength Index (RSI) to within striking distance of the 50.00 centreline and an indicator trendline resistance-turned-support level drawn from the high 69.44.
Shorter term, buyers and sellers are squaring off around the $1.25 handle, as of…
