Early in the American session, the British pound reached a new low around 1.2862. This level was last seen since November 2020.
Currently, GBP/USD is trading at 1.2879. However, the bearish move could continue and it is expected that the currency pair will stop its fall around 1.2853 and a consolidation will follow. This level represents a monthly support which could give the pair a technical bounce.
GBP/USD is weighed down by cautious comments from officials of Bank of England (BoE) and disappointing UK data. The pair has been under strong downward pressure and is expected to find support around 1.2850 or 1/8 Murray at 1.2817.
From a technical viewpoint, sustained weakness below the psychological level 1.3000 was seen as a key trigger for the bears and prompted aggressive selling. The key will be to wait for a daily close below 1.2850. In this case, the pound is expected to weaken in the coming days.
On the 4-hour chart, we can see that the pound is trading inside a downtrend channel formed since the end of March. The support of this channel coincides with the level of 1.2850, the pound is likely to rebound around this area and it will be an opportunity to buy whenever it consolidates and shows a sign of exhaustion.
The eagle indicator is still giving a bearish signal. Therefore, we should expect further declines in GBP/USD. The signal is expected to reach the oversold level around 5-points, then it will be an opportunity to buy the pound.
