The Pound on the Daily Chart has been in a downtrend since 1 June 2021 when it registered the high price at 1.42482, followed by a series of lower tops and lower bottoms.
On 20 July 2021, the Pound recorded the low price of 1.35710.
Applying Technical Indicators
When applying Oscillator Analysis to the price chart, one can see that price is trading below the SMA 60 period Moving Average line, a fact which confirms the Pound Sterling’s journey down south.
Furthermore, the Moving Average/Convergence Divergence (MACD) Oscillator is recording values below the zero line which hints to the bearish bias of financial instrument.
Additionally, the Relative Strength Index (RSI) Oscillator registers values below the fifty line which indicates negative sentiment.
All three technical indicators are in agreement with regards to the downward bias of the pair.
Three price targets may be calculated upon applying the Fibonacci tool to the price chart.
- The first price target is estimated at 1.36195 (161.8%).
- The second price target is seen at 1.34406 (261.8%).
- The third price target is projected at 1.31512 (423.6%).
While the first target has already been breached, the Pound Sterling is currently trading below the downtrend line.
Of course, supply and demand as well as the crowd sentiment will determine the future course of Pound Sterling.
Although the market is currently following a counter trend direction, this might just be a temporary correction, as long-term sentiment remains bearish.
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