GBPUSD is testing key support at around 1.2175. RSI is around 20 i.e., indicating extremely oversold but there is no divergence suggesting lower GBPUSD levels are likely. However, a correction should be expected. We rarely see these long periods of trends as we have now seen in GBPUSD (down trend since mid-July) without a larger correction
If RSI is breaking back above its falling (blue) trendline expect a correction to occur. A move up to test the 200 daily Moving Average from beneath is quite common after breaking below.
However, the 1.2175 support is not the strongest support level meaning GBPUSD is likely to continue (after a likely correction) its downtrend towards 1.20 level.
21, 55 and 100 Moving Averages are alle declining and the 200 is very close to showing an underlying bearish trend and sentiment
Medium-term GBPUSD is in a confirmed bearish trend after it closed last week below 1.23.
Weekly RSI is currently below 40 threshold and if closing the week below it will just add to the bearish picture with medium-term downside potential to around 1.18.
