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  • GBP/USD is looking south, having confirmed a bear flag breakdown on Tuesday.  
  • The pair has also found acceptance below key average support.  

GBP/USD is currently sidelined at  1.2218, having dropped 0.59% on Tuesday.

The pair has found acceptance below the 50-day moving average (MA) for the first time since Sept. 8. The MA is currently located at 1.2253.

More importantly, Tuesday’s drop confirmed a bear flag breakdown on the 4-hour chart. The breakdown indicates the sell-off from recent highs above 1.25 has resumed and the pair could fall to 1.21 (target as per the measured move method).

Supporting the bearish case are the descending 5- and 10-day moving averages (MAs) and the below 50-reading on the relative strength index.

4-hour chart

Trend: Bearish

Technical levels