• GBP/USD is facing strong resistance near 1.2400.
• Bearish trend line has formed resistance near 1.2420.

The British Pound, US Dollar pair declined sharply from the 1.2500 level. GBP/USD traded as low as 1.1933 before starting a fresh increase.

GBP/USD 4-Hour Chart (Trend: BEARISH)

On the 4-hour chart, the GBP/USD pair tested resistance near 1.2400 before correcting lower. The quote broke below support at 1.2300 and the 23.6% Fibonacci retracement level of the upward move from the swing low of 1.1932 to the swing high of 1.2407. The quote has since consolidated above 1.2200 and the 50% Fibonacci retracement level (of the 1.1932 low to the 1.2407 high). It continues to trade below both the 100-MA (red) and 200-MA (blue). 

If the pair turns bullish, the quote will first need to test resistance near the 1.2250 level. Above this there is further resistance near 1.2300 and the 100-MA (red). A break above here could see the quote climb up towards the 1.2400 level and the 200-MA (blue). This is also close to a key bearish trend line with resistance near 1.2420. Further gains could see the quote climb back up as far as the 1.2550 level.

In contrast, for the pair to continue bearish, the quote will first need to test support near the 1.2170 level, which is also close to the 50% Fibonacci retracement level (of the 1.1932 low to the 1.2407 high). Below this there is further support near 1.2050 and the 78.6% Fibonacci retracement level (of the 1.1932 low to the 1.2407 high). Further losses could see the quote drop back down towards the recent low of 1.1932.