The British pound broke heavily to the downside against the US dollar last week, with the pair suffering five days of straight losses.
GBP to USD analysis shows that sellers are increasingly likely to test the psychological 1.2000 support level this week.
GBP/USD medium-term price trend
The pound came under heavy downside pressure against the dollar, after breaking past the 1.2260 support barrier last week.
Federal Reserve Chair Jerome Powell’s testimony before the US Congress, the FOMC meeting minutes, and a slew of UK macroeconomic releases are set to generate more volatility for the pair this week.
GBP/USD technical analysis over the medium term shows that the pair could test major Fibonacci support this week.
The 50 per cent Fibonacci retracement of the current monthly high to the current yearly low is located just above the 1.2000 level.
Following large rallies, price retracements often move back to the 50 per cent Fibonacci retracement level.
With this in mind, traders that are bullish may look to re-enter from the 1.2000 level this week.
If the 1.2000 level is broken, it is entirely possible that the GBP/USD pair could fall towards the 1.1950 or 1.1800 level as the bearish breakout accelerates.
GBP/USD short-term price trend
GBP/USD technical analysis shows that the pair has a bearish short-term trading bias while the price trades below the 1.2400.
The lower time frames show that a bearish breakout from an ascending triangle pattern has recently taken place.
According to the size of the ascending triangle pattern breakout, the GBP/USD pair could fall towards the 1.2055 level over the short term.
Traders should also note that the recent breakout under the 1.2160 support level is extremely bearish in the short term.
Failure to move price back above the 1.2160 level could see traders continuing to sell any rallies in the GBP/USD pair.
Sustained gains above the 1.2160 level may encourage traders to test back towards the 1.2260 to 1.2300 resistance zone.
GBP/USD technical summary
GBP to USD analysis shows that bears may start to attack towards the 1.2000 level. A sustained loss of the 1.2090 support level should prompt additional technical selling.