GBPUSD was previously trading inside an ascending channel on its 1-hour time frame but has recently tumbled below support. This signals that a reversal from the uptrend is due, but a retest might happen first.

Applying the Fib tool on the latest swing high and low shows that the 61.8% level lines up with the broken support that might now hold as resistance. This is also around the 200 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction than to reverse, and resistance levels are likely to hold. Price is still hovering around the 38.2% level that’s just slightly above the 100 SMA.

RSI still has some room to climb before indicating overbought conditions, so bullish pressure could stay on for a bit longer. Turning back down could show that sellers are ready to return. Stochastic is already in the overbought zone and might be due to move south again soon, possibly taking GBPUSD back down to the swing low at 1.1961 or lower.

The pair tumbled on the news of Parliament blocking PM Johnson from having Britain leave the European Union without a deal. Johnson called for new elections after the House of Commons passed a bill to introduce legislation to lobby for a three-month extension of Brexit. The BOE Inflation Report hearings are due next and policymakers will likely be quizzed on “no deal” Brexit plans.

Meanwhile, the US dollar is facing the NFP release on Friday and leading indicators aren’t looking too good. The ISM manufacturing PMI slipped from 51.2 to 49.1 to reflect industry contraction instead of holding steady. The NFP is expected to show a slower gain of 160K versus the earlier 164K increase, possibly fueling expectations of another rate cut.