GBP/USD Price Analysis: Plummets below 1.1800, further downside remains on the cards

• GBP/USD witnessed aggressive selling on Thursday amid the relentless USD buying interest.
• Descending channel formation supports prospects for a further near-term depreciating move.
• A slightly oversold RSI on the daily chart suggests that bears could pause near the 1.1700 mark.

The GBP/USD pair added to its heavy intraday losses and dropped to its lowest level since March 2020, further below the 1.1800 mark in the last hour. The relentless US dollar buying picked up pace during the early North American session, which, in turn, was seen as a key factor behind the latest leg down.

From a technical perspective, Wednesday's attempted recovery move faltered near the 1.1965-1.1970 confluence resistance. The said region comprises the top end of a two-and-a-half-week-old descending channel and the 50-period SMA on the 4-hour chart. The subsequent downfall could be seen as a fresh trigger for bearish traders and supports prospects for an extension of the ongoing depreciating move.

Hence, some follow-through weakness towards challenging the descending channel support, around the 1.1700 round-figure mark, remains a distinct possibility. That said, RSI (14) on the daily chart is already flashing slightly oversold conditions. This, in turn, suggests that bearish traders could pause near the said handle, which might prompt some near-term short-covering move around the GBP/USD pair.

Any attempted recovery, however, might now confront stiff resistance near the 1.1800 mark. This is followed by resistance near the 1.1830-1.1835 region, above which the GBP/USD pair could aim to reclaim the 1.1900 round figure. Any further move up could be seen as a selling opportunity and runs the risk of fizzling out quickly near the aforementioned confluence, currently around the 1.1925-1.1930 area.

GBP/USD 4-hour chart

Key levels to watch