GBP/USD Price Analysis: Oversold RSI challenges bears bracing for 1.3500

• GBP/USD licks its wounds after the heaviest daily fall in a year.
• Oversold RSI conditions limit further downside, 61.8% Fibonacci retracement, July’s low test recovery moves.
• A descending trend line from April 12 gains sellers’ attention.

GBP/USD seesaws inside a 15-pip trading range surrounding 1.3540 after dropping the most since September 2020 the previous day.

In doing so, the cable pair bears take a breather amid the oversold RSI conditions during Wednesday’s Asian session.

However, the quote’s daily closing below 61.8% Fibonacci retracement (Fibo.) of December 2020 to June 2021 upside, near 1.3565, directs GBP/USD sellers towards a downward sloping trend line from April, around 1.3500.

Should the pair remain directed towards the south past 1.3500, despite oversold RSI, January 2021 low near 1.3450 may offer an intermediate halt during the extended fall targeting the December 2020 bottom surrounding 1.3135.

Alternatively, corrective pullback needs to overcome the stated key Fibo. level near 1.3565, as well as July’s low of 1.3572, on a daily closing basis to restore the upside momentum.

Following that, a five-week-old horizontal area near 1.3610 and a 200-day EMA level of 1.3723 will gain the market’s attention.

GBP/USD: Daily chart

Trend: Further weakness expected