FXStreet (Łódź) - FXStreet Chief Analyst Valeria Bednarik observes that GBP/USD continued dropping Thursday, showing a reversal of the bullish trend which pushed the pair up as high as 1.7190 in July.
“The 4 hours chart shows price recovery halted at 1.6926, a few pips below the daily ascendant trend line coming from October last year, broken yesterday.”
“20 SMA in the mentioned time frame converges with the line around 1.6940, acting as strong resistance in case of recoveries.”
“Furthermore, technical indicators in the mentioned chart present a strong bearish momentum which keeps the pressure to the downside: immediate support stands at 1.6850 and a break below should fuel the slide towards 1.6800 later on the day.”
“Further slides seem limited, as market players will likely remain cautious ahead of US data to be released on Friday.”
“Due dollar general strength and mounting risk aversion, gains towards 1.6940 should be seen as selling opportunities rather than a signal of more recoveries.”