GBP/USD May See Deepened Loss

WikiFX News (2 Oct.) - GBP/USD created the deepest loss since March after experiencing a surge early this year and a slump in September. The main theme for the pair this year lies in the Brexit and the outbreaks of COVID-19. In the last quarter of 2020, where will the British pound move to？

Technically speaking, GBP/USD dwindled straightly towards the 200-SMA (Simple Moving Average), a watershed between the upbeat and downbeat sentiment, after breaching the Rising Wedge support. The path of least resistance for the pair is expected to be lower as the RSI (Relative Strength Index) is approaching the oversold territory and the MACD indicator has fallen below the zero line.

Moreover, the negative slope of both the 21- and 50-DMA indicates a swelling bearish momentum, which could ultimately drive the price down to the confluent support crossed at the April high of 1.2648 and the uptrend extending from the May low of 1.2183 if the 200-DMA is unable to stifle selling pressure. On the contrary, a short-term recovery could be on the cards if price can climb back above the June high of 1.2813. Once there is a close above the August low of 1.2981 and the 50-DMA of 1.2960, the March high of 1.3200 may carve a path for a retest.

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Chart: Comparison of Currencies; GBP is 2020's worst performing currency.

Chart: Trend of GBP/USD