GBP/USD sold off sharply on Tuesday, striking a 1 month low.
A meaningful move below 1.3125-30 (confluence support) added to the bearish picture.1.3000 in the next key handle.
GBP/USD extended its selloff across the European session, plunging to a 1 month low, around 1.3020 in the last hour.
The Pound is dropping as the risk of a hard Brexit rises. Brexit fears plus a pickup in greenback demand is fuelling the selloff, marking 5 consecutive days of decline.
A meaningful move below 1.3125-1.3150 region, the ascending trend-line support in place since early August, prompted a deeper decline. The 1.3125/50 area also coincides with the 200-SMA on the 4-hourly chart. A prior move through support at1.3060-50 could have also set off the downwards bias.
Oscillators on the daily chart have started moving into bearish territory. However, on the hourly chart, oscillators are showing very oversold conditions. With this in mind, the motive for bearish traders should be cautioned.
That said, a break through 1.3000 could see bearish momentum pick up towards August lows, around 1.2980 ..
On the upside, resistance can be seen at 1.3060, followed by 1.3100 and trend-line support turned resistance near 1.3130.
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