The USD strengthened notably today, sending the GBPUSD pair 1% lower, destroying all the stop-losses below the essential triple bottom support.
The 1.36 level was a Maginot line for bulls as they had defended it three times over the previous months. However, today's selling was too strong for them, and the Pound declined below that level, clearing out all the stop-losses of long positions below that level.
As long positions were liquidated, sterling dropped another 50 pips to trade near 1.3550 at the time of writing. As a result, the medium-term outlook has changed to bearish.
The immediate trend now looks bearish, and rallies toward 1.36 are expected to be sold. However, if the GBPUSD pair rises back above the 1.36 level, it might be a bullish impetus from a false breakdown (bearish trap) pattern.
But for now, bears are in control, with the next target at the psychological 1.35 threshold.
Sentiment remains negative in the financial markets amid soaring US yields. Rising US yields are usually bullish for the greenback but negative for most other asset classes.