GBP USD plunges below support

GBP/USD (daily chart) has plunged below its 50-day moving average for the first time since early April. Prior to this drop, the currency pair had been holding relatively high in the midst of more pronounced pullbacks occurring in other major pairs like EUR/USD.

The current decline in GBP/USD occurs after price action hit a new four-year high of 1.6995 three weeks ago in early May, just short of its 1.7000 upside target. After dropping from that high, the currency pair pulled back to rebound off its 50-day moving average in mid-May. This same moving average, however, was unable to support Wednesday’s bearish move.

Despite the current bearish stance, the currency pair is still trading well within a sharp bullish trend that has been in place for the past 10 months – since the 1.4800-area low in July of 2013. Major support on this bullish trend in the event of further pullback resides around the 1.6500 price region, which is currently just above the pivotal 200-day moving average. To the upside, a rebound and recovery from support would continue to target the 1.7000 psychological level.

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