The British Pound plummeted to a fresh 2-week low against the greenback, as fears of a delay in a possible rate hike extended to the UK.
The GBP/USD lost over 200 pips daily basis, having been under pressure ever since the European opening, and with no clear catalyst behind the early decline, later supported by dollar’s demand.
The pair trades back around the base of these last 2-month range, which increases the potential of a mid-bearish continuation after the failed upward breakout, earlier this week.
In short term, the 1 hour chart shows that the technical indicators are starting to look exhausted towards the downside in extreme oversold levels, but remain far from suggesting an upward correction ahead, whilst the 20 SMA heads sharply lower well above the current price.
In the 4 hours chart, the Momentum indicator heads sharply lower , despite being in oversold territory, whilst the RSI indicator heads lower around 27.
Due to the sharp decline and the fact that the price is at a critical support level, the pair may see some consolidation, or even a shallow bounce, before setting another directional move, yet as long as the price remains below 1.5520, the risk remains towards the downside.