The British pound crashed to its weakest trading level against the US dollar since 1985 earlier this week, as traders and investors turned heavily bearish towards the UK economy.
GBP to USD analysis shows that the pair could fall towards the 1.0500 level if price continues to trade below the 1.1950 level.
GBP/USD medium-term price trend
Sterling fell to its weakest level since 1985 earlier this week over concerns about the health of the United Kingdom economy, amidst the worsening outbreak of the coronavirus.
A series of key technical levels were broken during the recent decline, placing the GBP/USD pair in a precarious position over the long term.
GBP/USD technical analysis shows that the pair could fall towards the 1.0500 level now that the 1.1950 level has been broken.
The invalidation of a huge inverted head and shoulders pattern with over 1,000 points downside potential on the daily time frame implies that the GBP/USD pair could still fall much lower.
Key upcoming technical support for the GBP/USD pair is found at the 1.1320 and 1.1200 levels.
GBP/USD short-term price trend
GBP/USD technical analysis shows that the pair has staged a strong rebound from just above the 1.1470 support level.
The one-hour time frame shows that large amounts of bullish MACD price divergence has been created during the recent decline.
Bullish MACD price divergence currently extends towards the 1.2400 resistance level. Gains above the 1.1950 level are currently needed to encourage short-term technical buying.
Multiple weekly price closes below the 1.1950 level should be considered extremely bearish for the GBP/USD pair in the short-term, while a weekly price close above the 1.1950 level would be encouraging for GBP/USD bulls.
GBP/USD technical summary
GBP to USD analysis shows that the GBP/USD pair could fall towards the 1.0500 level. The recent break below the 1.1950 level is an extremely bearish technical development for sterling.