The GBP/USD has experienced downwards pressure for several weeks on rumours of a ratings downgrade, which proved true after Moody's cut the United Kingdom's sovereign rating by a notch to 'Aa1'.

In terms of technical analysis, there was a breakout of a previously mentioned support level at 1.5230-1.5260, according to Digital Look.

"This is important because it leaves the path clear for a bearish continuation towards the support at 1.4220, the 2010 low," analysts said.

Nevertheless, they said that there could still be a strong rebound as a result of high oversold levels.

"Such a rebound could take the currency pair towards the new resistance level (previously support) at 1.5230-1.5260. In fact, a greater rebound towards the weeekly bearish gap at 1.55 should not be ruled out.

"Regardless, the above-mentioned breakout took the GBP/USD below a wide trading range that spanned over more than a year. That is a clear bearish signal."



JR

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