by FXOpen on April 24th, 2019

GBP/USD outlook: a new downward channel has been formed

The British pound went higher on Tuesday early in the morning as the official spokesman said that the PM Theresa May’s focused on passing the law necessary for the Brexit ratification. The spokesman told reporters that negotiations are underway with the Labor Party to find ways to promote Brexit. Compromises on both sides will be required in order to make progress in the Brexit process. However, by the end of the day the GBP/USD went lower. The reason was the activity of traders after the holiday and in connection with the general strengthening of the US Dollar.

GBP/USD technical analysis

The British Pound failed to break the 1.3020 resistance and declined recently against the US Dollar. The GBP/USD pair broke the 1.2975 support level to move into a bearish zone.

Sellers even pushed the pair below the 1.2950 level, with a close below the 50 hourly simple moving average. The pair traded as low as 1.2928 and it is currently consolidating losses inside a contracting triangle with resistance at 1.2945 on the hourly chart.

If there is an upside break, the pair could test the 23.6% Fib retracement level of the last decline from the 1.3018 high to 1.2928 low.

On the downside, the main support is at 1.2930 and 1.2925. If GBP/USD fails to move higher, there is a risk of a sharp drop below the 1.2925 support. The next key support is at 1.2900, where buyers may emerge.

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