GBPUSD – sharp selloff deepens, breaking below key support zone

The British pound extended its sharp decline for the fourth consecutive session, breaking below key support levels around the 1.3140 zone, which represents the 38.2% Fibonacci retracement of the 1.2099–1.3788 rally and the former higher base formed by the May 11 and July 27 lows. The pair dropped to its lowest level since mid-April.

Sterling remains under heavy pressure as the US dollar strengthens following the Federal Reserve’s hawkish rate cut, while renewed expectations that the Bank of England could deliver a rate cut next week—contrary to broad market consensus for a hold—further weigh on sentiment.

The daily moving averages have turned fully bearish, with the recent 5/200DMA death cross reinforcing negative signals. Strong downside momentum continues to dominate, aligning with deteriorating fundamentals and keeping the near-term outlook weak.

The pair is on course for its second consecutive weekly loss, with bearish momentum accelerating this week. It also looks set to close the month lower, recording a 2.4% monthly decline, which supports the view of a developing reversal pattern on both weekly and monthly charts. A decisive break below the 1.3140 support zone would complete a bearish failure swing formation.

Sellers now target the immediate levels at 1.3100 (psychological round figure) and 1.3078 (55-week moving average), which represent the final barriers before the key 1.3000 psychological support.

However, short-term price adjustments may occur as technical studies approach oversold conditions. The broken 200DMA at 1.3246 now acts as a solid resistance level and is expected to cap any potential rebounds.

Resistance levels: 1.3140; 1.3213; 1.3246; 1.3282
Support levels: 1.3100; 1.3078; 1.3000; 1.2944