- GBP/USD is trading 0.70% lower on the session as a wave of risk-off sentiment kicks in.
- There was a key technical level that was rejected and the MACD histogram is starting to turn.
GBP/USD 4-hour chart
GBP/USD is a very risk-sensitive currency pair at the moment. The major bourses are all moving to the downside and GBP has sold off with them. GBP is one of the worst-performing currencies of the session but NZD and AUD are also very risk-sensitive and are fairing slightly worse at the time of writing. GBP/NZD and GBP/AUD are both trading slightly higher on Wednesday.
Looking at the 4-hour chart, the red internal trendline was tested and rejected to perfection. There was a confluence of bearish indicators at this level but in a previous article, the touted 1.25 level was the original bearish trigger and there was a slight overshoot. The 38.2% Fibonacci retracement zone and 55-period Exponential Moving Average were also in very close proximity of the zone.
Looking ahead now, the 200 Simple Moving Average could be a sticky point but the main target is the wave low. The low currently stands at 1.2335 and a break could be confirmation that the bearish trend could continue Looking at the MACD, the histogram is just about to roll over into the red. This is yet another bearish signal that the trend will continue to the downside.
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