GBPUSD's Bearish Bias Growing Ahead of FED's Meeting

OANDA:GBPUSD   British Pound / U.S. Dollar
The current ranging environment is demonstrated by the ADX indicator, which has been threading below the 25-point benchmark since the 24th of May.

The development of a descending channel elucidates the gradual transition from one market stage into another. The recent reversal from the channel's upper boundary, which also represented a reversal from the 100-day MA (in blue) and the major resistance level at 1.41800, highlights the strengthening bearish bias in the short term.

The price action is testing the 200-day MA (in orange) for a second time while also consolidating below the 23.6 per cent Fibonacci retracement level at 1.41114. This represents the aforementioned preliminary stage in the development of a new markdown.

The next major target is underpinned by the 38.2 per cent Fibonacci retracement level at 1.40291, which is currently coinciding with the channel's lower boundary. If the price does not rebound from the two, the downtrend can be extended lower and towards the major support level at 1.40000.

In addition to its psychological significance (elucidated by the two rebounds in the past), this level also converges with the 300-day MA (purple). Hence, bears should eye the range between 1.40000 and 1.40291 as the first threshold in the development of a new broad downtrend.


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