GBP/USD: Next bearish target is located at 1.2250

GBP/USD has extended its slide following last week's slump. As FXStreet’s Eren Sengezer notes, cable eyes fresh multi-year lows amid risk aversion.

Pound to stay on the back foot amid risk-averse market environment

“Although the RSI suggests that GBP/USD is about to turn technically oversold, the pair could continue to push lower without needing to make a technical correction if the risk sentiment remains the primary market driver.”

“On the downside, 1.2250 (static level from June 2020) aligns as the next bearish target. With a drop below that level, additional losses toward 1.22 (psychological level) could be witnessed.”

“The descending line coming from May 5 forms the first resistance at around 1.2320, which is reinforced by a static level as well. A four-hour close above that line could be seen as a bullish sign and open the door for a rebound toward 1.2370 (static level) and 1.24 (psychological level, 20-period SMA).”