FxWirePro: Never buck GBP/USD downtrend as bears break major support, just 200pips away from multi-year lows

On daily charts, the bears manage to break below major supports of 1.2327 and 1.2205 levels; the current prices remain well below DMAs with confirmation from momentum indicators.

The price dips may extend up to next strong support of 1.2107 on healthy bearish momentum as we could notice bearish convergence on leading oscillators.

On a broader perspective, both leading & lagging indicators confirm the major bearish trend, current well below EMAs heading for a retest of multi-year lows.

The downswings have constantly been sliding testing resistance at EMAs, with confirmation from both trend and momentum indicators (refer monthly charts).

RSI’s downward convergence below 38 levels on dailies and below oversold territory signal the strength in the bearish trend.

Stochastic curves on both time frames have been decisive to signal the bearish momentum.

MACD is not deviating from this bearish stance, signals the downtrend to prolong further with its bearish crossover.

Trade tips:

As we are just 200 pips away from the recent lows of 1.1950, contemplating lingering bearish indications at this juncture, on both hedging and speculative grounds we recommend shorting mid-month month futures as the underlying spot FX likely to target towards 1.1950 levels.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

These margin requirements are determined by the exchanges and would usually be ranging from 2 to 10% of the full value of the futures contract.