GBPUSD redraws monthly bottom, drops towards 1.3550

GBPUSD takes offers around 1.3620, refreshing one-month low after UK Retail Sales for July disappointed the cable traders during early Friday. Also weighing on the quote could be the US dollar’s safe-haven demand, backed by the covid and taper tantrums. It’s worth noting that the quote’s sustained trading below 200-DMA and bearish MACD adds to the downside signals. Hence, GBPUSD prices are likely to remain weak, at least for now, but a descending trend line from April 12, near 1.3550, could restrict the quote’s further weakness. Additionally challenging Sterling’s weakness around 1.3550 is the RSI conditions, which if ignored could portray a 100-pip slump to 50% Fibonacci retracement.

On the contrary, the corrective pullback may aim for April’s low near 1.3670 before targeting 200-DMA around 1.3785. However, a convergence of a downward sloping trend line from June and a 23.6% Fibonacci retracement level around 1.3880 will become a tough nut to crack for the GBPUSD bulls past 1.3785. Successful trading beyond 1.3785 will confirm a falling wedge bullish chart pattern opening the door for a north-run targeting a fresh yearly top beyond 1.4250.