GBP/USD Outlook: Extended Weakness Hit New Three-Week Low and Cracked Important Fibo Support

Technical analysis of Forex market

Cable extended weakness to new three-week low at 1.2904 on Monday, following brief consolidation above psychological 1.30 support and subsequent bearish acceleration.

The sentiment remains weak as fears about hard Brexit at the end of 2020 rise, keeping near-term focus at the downside.

Fresh weakness cracked important Fibo support at 1.2919 (38.2% of 1.1958/1.3514), with close below here expected to generate bearish signal for extension of pullback from post-election spike-high at 1.3514 towards supports at 1.2820 (top of rising daily cloud) and 1.2768 (8 Nov low).

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Daily momentum broke into negative territory, RSI heads south, 10/20/30DMA’s in negative setup and converging daily Tenkan-sen/Kijun-sen, supporting bearish scenario.

Pre-holiday lower volumes and rising dollar contribute to pound’s bearish action, with bears pausing above new low after weaker than expected US durable goods orders temporarily deflated the greenback.

Broken 1.30 support (reinforced by falling 10-period MA on 4-hr chart) marks solid barrier which is expected to cap stronger upticks.

Res: 1.2980; 1.3000; 1.3032; 1.3070
Sup: 1.2904; 1.2879; 1.2820; 1.2768