GBP/USD Due for Pause as Pound's Decline Looks Overdone

The British pound is due for a pause in its decline against the US dollar, but a strong jobs report this week could cut short any rebound.

According to analysts at Pound Sterling Live, the pound's slide has been severe enough that it's ripe for a mean-reverting bounce or consolidation. The gap between the current spot price and the 21-day moving average is wide enough to suggest the selling has run ahead of itself.

The 21-day moving average is falling steeply, but exchange rates tend to revert back to it when they're this far off. A rebound in the pound would first meet resistance at 1.3274, the late-July low, and then at 1.3302, the floor that held through May and June.

The medium-term bias remains pointed lower, with June's low at 1.3140 as the next support level. A daily close above 1.3302 would suggest the selloff has run its course, but until then, the Pound to Dollar forecast stays bearish beyond the near term.