GBP/USD Price Analysis: Below 1.30, eyes head-and-shoulders support

• GBP/USD looks set to test key support at 1.2960. 
• A close lower would confirm a head-and-shoulders breakdown.

GBP/USD ran into offers on Monday as expected and fell below 1.30, validating the sign of buyer exhaustion on the weekly chart. 

The pair now looks set to test the head-and-shoulders neckline support at 1.2960 with the 5- and 10-day averages flashing a bearish crossover and the 14-day relative strength index reporting bearish conditions with a below-50 print. 

A close below that level would confirm a breakdown or a bearish reversal and create room for a slide to 1.2582 (Sept. 20 high). 

A strong bounce from the neckline support at 1.2960 would weaken the bearish case. That said, the outlook would turn bullish if and when the pair rises above 1.3250, invalidating the lower highs setup (right shoulder) on the daily chart. 

At press time, the pair is trading near 1.2990. 

Daily chart

Trend: Bearish

Technical levels