GBP/USD Under Pressure: Further Declines Possible Amid Weakening Upward Momentum
The GBP/USD currency pair is exhibiting symptoms of further weakness as recent price movements indicate a bearish bias. Following the breach below the critical 1.3500 support line and a dip to a low of 1.3458, the Pound is exposed to the US Dollar. Though oversold conditions may restrict near-term downside to a retest of 1.3460, UOB Group analysts warn that a clear breach below 1.3420 would set the stage for further losses. Resistance zones lie at 1.3525 and 1.3555, with the overall bearish bias intact unless GBP/USD rises above the formidable resistance at 1.3580. KEY LOOKOUTS • Support at 1.3460 is immediate, with a stronger level at 1.3420; a break through here could initiate further downside. • Resistance on the upside is capped by 1.3525 and 1.3555, with strong resistance at 1.3580. • Tentative pickup in downward momentum implies sustained bearish bias, notwithstanding present oversold levels. • Continuation of trading below 1.3500 confirms diminishing upward momentum, raising risk of further declines to 1.3420 and lower. GBP/USD currency pair continues to experience selling pressure as recent price action reflects a change towards a bearish trend. Following the breaking of key 1.3500 support level, the pair fell to 1.3458 before slightly rebounding. Although oversold conditions suggest limited near-term downside, analysts caution that a prolonged break below 1.3420 would bring about further decline. On the positive side, resistance points at 1.3525, 1.3555, and the more important barrier at 1.3580 could cap any resulting bounce, preserving the overall bearish bias for the moment. GBP/USD continues to be pressured after falling through the 1.3500 support point, hitting lows around 1.3458. Though oversold markets can inhibit near-term losses, a break below 1.3420 might prompt losses to extend. Most important resistance levels are still 1.3525 and 1.3580. • GBP/USD fell below the pivotal 1.3500 level, its low at 1.3458. • Pair’s current market sentiment is negative. • Levels to watch for support are 1.3460 and 1.3420. • Levels of resistance are located at 1.3525, 1.3555, and 1.3580. • Oversold markets might put a cap on immediate decline, but the bearish momentum continues. • Economic announcements, central bank policy, and world sentiment remain in charge of directing the market. • A drop below 1.3420 would prompt further declines, and a breakout above 1.3580 would reduce selling pressure. The recent activity on GBP/USD mirrors market sentiment shaped by economic releases, central bank actions, and world financial conditions. The Pound Sterling has been responding to changes in investors’ confidence, geopolitical developments, and monetary policy expectations, particularly in terms of interest rate differentials between the Federal Reserve and the Bank of England. Market participants also continue to watch macroeconomic data like inflation, employment, and GDP growth that continue to influence the direction of both currencies. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView Market mood is also influenced by wider risk drivers such as global trade patterns, geopolitics, and appetite for risk assets on the part of investors. Shifts in these drivers can trigger shifts in currency flows, with traders rebalancing in response. As ever, forthcoming economic data releases and the words of central bankers will be keenly in the spotlight, providing additional insight into the likely direction of GBP/USD over the next several weeks. TECHNICAL ANALYSIS GBP/USD’s decline from recent levels below 1.3500 indicates weakening bullish strength and the onset of a bearish bias. The pair touched 1.3458 briefly, suggesting that sellers are starting to take charge. Although oversold short-term conditions mean some rebound or consolidation might occur, the larger context indicates further downside threats if the pair breaks through the level of major support at 1.3420. Levels of resistance at 1.3525, 1.3555, and particularly 1.3580 are likely to mark any meaningful rally unless robust bullish catalysts are realized. FORECAST If GBP/USD succeeds in regaining the upward trend, a recovery to the resistance levels of 1.3525 and 1.3555 would be observed. A break above these levels may pave the way for another surge towards the stronger resistance at 1.3580. But any rally is set to remain capped until there is a dramatic shift in sentiment or positive economic news in favor of the Pound. On the flip side, the pair is susceptible as long as it holds below the major resistance levels. A short-term retest of the 1.3460 support and a clean break below 1.3420 may speed up selling pressure, potentially leading to a steeper fall. If bearish momentum gains further traction, the next major support would be found further down, which increases the risk of a prolonged downtrend.