It falls below 1.3200 as the US dollar recovers

• GBP/USD momentum favors sellers, possibly targeting the July 17 high of 1.3043.
• Further declines could test 1.3043; next major support at March 8 high of 1.2893.
• For a reversal, buyers need to break above 1.3200, targeting a two-year high at 1.3266, then 1.3293 and 1.3437.

GBP/USD extended its losses to two straight days and cleared the bearish 1.3200 mark as bears woke up from August’s 400-pip rally, smashing their expectations for lower prices. Despite the lack of UK economic data, the record remains busy across the pond with good data supporting the Greenback. The pair is therefore trading at 1.3151, down 0.30%.

GBP/USD Price: Technical Insights

The GBP/USD daily chart suggests that in the near term the pair could target and test the latest cycle high on July 17 at 1.3043. Momentum turned in favor of the sellers as the Relative Strength Index (RSI) peaked at overbought. However, it eventually bounced back below the 70 level, fueling the major two-day pullback at current exchange rates.

While sellers are in charge, they need to clear the 1.3100 figure and the 1.3050 psychological support before testing the lower waters. If these two levels are cleared, GBP/USD could target 1.3043 and on further weakness, the March 8 daily high appears as the next area of ​​demand at 1.2893.

On the other hand, if buyers want to counterattack, they need to breach the 1.3200 figure. This will immediately expose the two-year high at 1.3266. A breach of the latter and buyers could challenge the March 23, 2022 daily high at 1.3293 before the March 1, 2022 swing high at 1.3437.

GBP/USD Price Action – Daily Chart