GBPUSD: Cable Extends Steep Fall as Exodus into Safety Accelerates

Technical analysis of Forex market

Cable falls further in early Monday, hitting the lowest since Sep 2020, extending Friday’s 1.5% drop (the biggest daily fall since 18 Mar 2020) and last week’s 1.64% loss (the biggest weekly fall since mid-Aug 2021).

Bears gained pace after eventual break of psychological 1.30 support, with sharp fall in global stocks, rising dollar on safe-haven buying and much weaker than expected UK retail sales and PMI data, released last Friday, adding to pound’s negative sentiment.

Steep fall broke below 50% retracement of 1.1409/1.4249 uptrend at 1.2829 (reinforced by monthly Kijun-sen) and emerged below falling monthly Ichimoku cloud, generating additional bearish signals.

Bears focus Sep 2020 low at 1.2675, but could extend towards 1.2494 (Fibo 61.8% of 1409/1.4249).

Bearish studies on daily and weekly charts are supportive, with oversold conditions suggesting bears may take a breather in coming sessions, with limited upticks to offer better levels to re-enter the downtrend.

Broken Fibo 50% level (1.2829) should ideally cap and guard upper pivots at 1.30 zone (former base / falling 10DMA / psychological).

Res: 1.2767; 1.2810; 1.2829; 1.2857
Sup: 1.2700; 1.2675; 1.2615; 1.2545