GBP/USD declines to 5-1/2-year low , more downside expected

GBP/USD slipped to 5 -1/2 year low on  Tuesday as the greenback rose against sterling following soft UK industrial output data. The GBP/USD pair made modest gain in early European session hitting as high as 1.4470 but was unable to move further on broader weakness, and declined to hit low around 1.4375 shedding almost 90 pips in mid-European session.

• Currently the pair is trading around 1.4422 levels with oversold condition and a pull back towards 1.4440 levels can be expected.
   
• 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 29.
   
• To the upside, the strong resistance can be seen at 1.4495, a break above this level would expose the cable to next resistance level at 1.5450 levels.
   
• To the downside strong support can be seen at 1.4410, a break below at this level will open the door towards next level at 1.4360.
  
  Recommendation: Go short around 1.4440, targets 1.4380, 1.4320, SL 1.4500
  
  Resistance Levels
  
  R1:  1.4453 (50% Retracement level)
  
  R2: 1.4495 (61.8 % Retracement level)
  
  R3: 1.5450 (Jan 12th high)
  
  Support Levels
  
  S1: 1.4410 (38.2 % Retracement level)
  
  S2: 1.4360 (23.6 % Retracement level)
  
  S3: 1.4300 (Psychological levels)