Portrays three-day downtrend to poke 1.2100 key support

• GBP/USD holds lower ground near one-week low, down for the third consecutive day.
• Convergence of 21-DMA, monthly support line challenges bears.
• Downward sloping resistance line from mid-June restricts immediate upside.

GBP/USD bears keep reins for the third day in a row around the intraday bottom, down 0.22% intraday heading into Monday’s London open.

While a downward sloping resistance mile from mid-June triggered the GBP/USD reversal, a confluence of the 21-DMA and a one-month-old upward slopping support line, close to 1.2100, challenge the bears.

Given the recently easing bullish bias of the MACD, as well as descending RSI (14), GBP/USD is likely to extend the latest weakness beneath the 1.2100 key support level.

Following that, the 23.6% Fibonacci retracement level of the pair’s downside between late May to mid-July, around 1.1975, could offer an intermediate halt during the pair’s slump towards the yearly low near 1.1760.

Meanwhile, recovery moves may initially attack the 50% Fibonacci retracement level of 1.2215 ahead of challenging the stated resistance line from mid-June, close to 1.2260 at the latest.

In a case where the GBP/USD buyers manage to cross the 1.2260 hurdle, the monthly peak near 1.2295 and the mid-June swing high near 1.2410 could test the bulls before giving them control.

GBP/USD: Daily chart

Trend: Further weakness expected