GBP/USD Looking To Setup For An Extended Dip

GBP/USD is moving in a nice downward trend and seems to be taking a little breather and set itself up for an extended dip. The initial target of this dip will be around 1.4060 level and once GBP/USD managed to break below that level, the next target will be at 1.3870 level. To take a dip towards 1.3870 level, GBP/USD needs some good momentum and it seems to be gathering that at the moment.

Currently traders will mainly looking to sell GBP/USD and not only long term traders but also the intra-day traders will be looking for reasonable levels to sell GBP/USD. One such good level can be seen around 1.4260 level. The aggressive traders might not agree with me and might sell GBP/USD well below that level. If GBP/USD breaks above 1.4260 level, then the next selling level can be seen around 1.4420 which also is a strong weekly level.

All the three moving averages are currently pointing downwards indicating the downward nature of the market. The short term moving average is just around 1.4260 level which confirms the importance of this level and similarly the long term moving average is around 1.4420 level. RSI is just below 42 in daily chart which is a little on the lower side but still seems to have more than enough space to allow GBP/USD to make a dip towards 1.3800 level.

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