After hovering near the psychologically important level of 1.3000, the GBP/USD pair has finally broken it, moving downwards. It triggered a prolongation of the bearish trend. The pound sterling shed 200 pips in a day.
The RSI indicator passes near the critical oversold level of 18.33 on the 4H chart. The last time the indicator approached this level was in March 2020. Back then, there was a slowdown in the downward movement.
On the H4 and D1 charts, the Alligator indicator shows that the moving averages are pointed downwards. This is a sell signal. The daily chart reflects a gradual weakening of the pound sterling since June 2021. The decline amounts to 1,400 pips or about 10%.
Outlook
The prevailing downward trend is seen clearly. It is likely to last for a long time. Despite the strong bearish movement, the market has two cycles - downward momentum and correction.
Therefore, the current momentum will sooner or later be replaced by the correction stage. The main signal is the oversold status of the EUR/USD. The swing lows of September 2020 - 1.2675/1.2720 - may act as support.
The complex indicator analysis gives a sell signal on the short, intraday, and medium-term charts due to the prolongation of the downtrend.
