GBP/USD Technical Analysis: RSI divergence supporting case for downside test of wedge support structure

• GBP/USD is moving towards a breakout point within a rising wedge on the daily chart and testing an hourly resistance structure within the wedge - where topside failure is to be expected noting the bearish RSI divergence, ultimately reinforcing the case for the downside.
• As can be seen in the chart below, 1.3290s is a key resistance level and will determine whether the pair breaks out to the top side or fall out of the wedge to the downside on sustained pressures below it.
• However, the price still has some work to do until it reaches the narrowest point of the daily wedge.
• A break to the downside and below the 1.3180s support would be expected to make way for a test of 1.3100.
• Then, below the 1.3000 opens a double Fibo retracement at 1.2900/1.2895 guarding the recent low at 1.2772.
• However, GBP is trading erratically due to Brexit headlines which likely jeopardises the traditional technical chart patterns. A breakout is expected one way or another depending on the outcome of the fundamentals. In such a scenario, the flash crash lows, 1.2456, and late 1.40 the figure guarding mid-April highs in the 1.4380s would be targetted.

GBP/USD daily chart