GBP/USD Price Analysis: Bears flirting with monthly lows, around 1.2300 mark

• GBP/USD failed to capitalize on its early attempted recovery move to the 1.2400 neighbourhood.
• The set-up remains tilted in favour of bearish trades and supports prospects for a further decline.
• Any meaningful move up now seems to confront fresh supply near 1.2355-60 region (61.8% Fibo.).

The GBP/USD pair dropped to fresh monthly lows in the last hour, with bears now waiting for a sustained break below the 1.2300 round-figure mark.

The pair's inability to capitalize on its early attempted recovery move to the 1.2400 neighbourhood and a subsequent fall points to persistent selling bias. This comes on the back of the formation of a descending trend-channel, which further points to a well-established bearish trend.

Meanwhile, the pair already seems to have found acceptance below the 61.8% Fibonacci level of the 1.2076-1.2813 positive move. This coupled with the fact that oscillators on the daily chart have just started drifting into the negative territory add credence to the bearish outlook.

The pair seems all set to break below the 1.2300 mark and slide further towards testing the 1.2255-50 horizontal support. The downward trajectory could further get extended towards the 1.2200 round-figure mark before the pair eventually drops to the next major support, near the 1.2170-65 region.

On the flip side, immediate resistance is pegged near the 1.2355-60 region (61.8% Fibo. level), above which the pair is likely to make an attempt to reclaim the 1.2400 mark. This is followed by 50% Fibo. level, near the 1.2445 area, which should act as a key pivotal point for short-term traders.

GBP/USD 4-hourly chart

Technical levels to watch