GBP/USD slipped to fresh 7 year low on Monday as Sterling was hurt by worries about possible British exit from European Union. The pair made modest gain in early European session hitting as high as 1.3920 but was unable to move further on broader weakness, and declined to hit low around 1.3938 shedding almost 70 pips in mid-European session.
- Currently the pair is trading around 1.3890 levels, it is set to decline further towards 1.3800 and later 1.3750 in the short term.
- Technically in the 4 hour chart the 55, 30 and 20 MA depicts a clear bearish slope above the current price action, the RSI is indicating towards downside at 31.
- To the upside, the strong resistance can be seen at 1.3963, a break above this level would expose the cable to next resistance level at 1.4000 levels.
- To the downside strong support can be seen at 1.3870, a break below at this level will open the door towards next level at 1.3822.
Recommendation: Go short around 1.3970, targets 1.3870, 1.3770, SL 1.4010
Resistance Levels
R1: 1.3908 (61.8 % Retracement level)
R2: 1.3921 (21-DMA)
R3: 1.3970 (Feb 26th high)
Support Levels
S1: 1.3870 (50 % Retracement level)
S2: 1.3822 (38.2 % Retracement level)
S3: 1.3767 (23.6 % Retracement level)
