GBP/USD Price Analysis: Challenges critical support near 1.3630 after 200-DMA caves in
- GBP/USD extends the rout amid looming Delta covid variant fears.
- The cable eyes a daily closing below the key daily support line.
- Monday’s closing below 200-DMA, bearish RSI keep sellers hopeful.
GBP/USD bears remain relentless, extending losses for the fourth straight day on Tuesday, as the technical setup continues to flag further downside risks.
With Brexit headlines in the background, the main cause for concern for the GBP bulls remains the spiking cases of the Delta covid variant in the UK, as the Kingdom removed most of the social curbs on Monday.
Concerns over escalating covid cases in the UK amid the reopening prompted GBP/USD to breach the horizontal (orange) trendline support at 1.3633 on the daily sticks.
The bears await a daily closing basis below that level to confirm an extension of the latest downtrend, which could open floors towards the February lows of 1.3567.
Ahead of that support, the 1.3600 round number could test the bullish commitments.
The Relative Strength Index (RSI) edges lower but sits outside the oversold region, suggesting that there is some scope left for further downside.
Meanwhile, Monday’s close below the 200-Daily Moving Average (DMA), now at 1.3702, adds credence to the negative bias.
GBP/USD daily chart
Alternatively, if the abovementioned key trendline support holds up, a rebound towards the upward-sloping 200-DMA remains well on the cards.
The next stop for the bulls could be then seen at the July 19 high of 1.3677.
GBP/USD additional levels to watch