GBP/USD has been extending its gains as the dollar gains ground alongside US Treasury yields. The UK may tighten its restrictions as hospitals are under immense pressure from the flood of coronavirus patients.

From a technical perspective, GBP/USD appears poised to extend its recent slide lower.Pound/dollar lost critical support at 1.3545, which had held up nicely in the early days of 2020 – until it collapsed. The loss of this critical support line is a bearish sign.

Moreover, with the RSI continuing to respect the downtrend extending from the August extremes, also suggests the path of least resistance is lower in the near term.

Support awaits at 1.3440 which coincides with 50% fibonacci retracement, which was a cushion in late 2020, followed by 1.33, a stepping stone on the way up. Further down, 1.3230 and 1.3190 are eyed.

Alternatively, pushing back above the psychologically imposing 1.3500 mark could inspire a rebound back towards the monthly high (1.370) are eyed.