Ella 
GBP/USD encountered new supply in Asia on Friday, struggling to extend the previous day’s slight rebound from around 1.2235, the lowest level since late March. GBP/USD is currently trading around 1.2280-1.2275, falling for a third day in a row and appears vulnerable to further losses.
Sterling (GBP) continued to perform relatively sluggishly on Thursday after the Bank of England unexpectedly decided to keep interest rates unchanged. In contrast, the Federal Reserve’s hawkish outlook suggested at least one more interest rate hike is likely before the end of the year, which helped keep the dollar flat just below six-month highs. This, coupled with overall weakness in the stock market, is bullish for the safe-haven dollar and weighs on GBP/USD.
From a technical perspective, the recent sharp decline in GBP/USD from around 1.1275, the 17-month high hit in July, is sustained within a downtrend channel. This indicates that GBP/USD has established a short-term downward trend, which is favorable for bears. In addition, the daily oscillator is in negative territory and is still far from oversold territory, validating the bearish outlook for GBP/USD. Therefore, a retest of channel support near 1.2235-1.2230 is highly likely for GBP/USD.
Follow-on selling in GBP/USD would confirm a new bearish breakdown and push GBP/USD further below the 1.2200 round-figure mark and then towards new support near the 1.2170-1.2165 area. GBP/USD is likely to sink further towards the 1.2140-1.2135 intermediate support and eventually towards the 1.2100 mark.
On the other hand, as long as GBP/USD rebounds above the 1.2300 integer level, it may face strong resistance near the overnight swing high of 1.2350. This is followed by resistance around 1.2375, above which GBP/USD could revisit the 1.2400 mark. However, subsequent gains in GBP/USD may still be viewed as a shorting opportunity before encountering resistance above the 200-day simple moving average (SMA) support reversal, which currently sits around the 1.2435-1.2440 area.
