GBPUSD is trading around 1.3430 where we expected to see a bounce. Price remains in a bearish trend making lower lows and lower highs. Price has formed a short-term bearish channel and as long as price is inside it, we continue to expect a new lower low.

Blue lines - bearish channel

Black lines -Fibonacci retracements

GBPUSD has retraced 61.8% of the entire upward movement from 1.3165 to 1.3747. The 61.8% Fibonacci level is key support and a price level where we often see trend reversals. Combined with the bullish divergence signal by the RSI, the chances of a bigger reversal are increasing. The bullish divergence is only a warning and not a reversal sign. A rejection at current levels around 1.3440 will be a bearish sign and will increase chances of seeing a lower low. If the lower low comes and the RSI provides a higher low, then we will start thinking of buying the pull back. A new lower low in price combined with another bullish divergence, would be a bullish signal implying that the downtrend will soon be over as it is weakening.