The GBP/USD pair has been experiencing significant fluctuation recently. The technical analysis indicates a structure of lower highs and lower lows since its 15 month peak of 1.3141. The Relative Strength Index (RSI) has entered its 30 oversold mark and the stochastic oscillator is touching its 20 oversold territory, suggesting that the recent drop might be overstretched.
On the fundamental side, the pair’s direction reversed from a decline towards 1.2100 and rose above 1.2150 . This shift was due to a positive change in risk sentiment and disappointing ISM Services PMI data, making it difficult for the USD to find demand. However, if markets remain risk-averse, investors could ignore these technical conditions.
In conclusion, while the Cable shows signs of overselling in the technical analysis, fundamental factors also play a crucial role in its movement. Therefore, traders should keep an eye on both technical indicators and fundamental news to make informed decisions.