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GBP/USD Falls Before UK Labor Market Figures: Most Important Factors Contributing to the Market Decline

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  • February 18, 2025
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GBP/USD has fallen around 1.2600 before important UK labor market figures, ending its five-day streak of gains. Traders expect an increase in unemployment and claimant count, which may weigh on the British Pound. UK PM Keir Starmer’s demand for a “US backstop” in a Ukraine peace agreement also brings geopolitical uncertainty. On the American side, the Dollar rallies on increasing Treasury yields and dovish Fed comments, with policymakers reiterating that inflation threats remain. From a technical point of view, GBP/USD is approaching major support at 1.2600, with additional selling potential if numbers are disappointing. Investors are closely watching UK job data and Fed policy cues for the next move. KEY LOOKOUTS • UK labor figures are awaited by traders, as the unemployment rate is predicted to increase to 4.5%, influencing GBP/USD. • UK PM Keir Starmer demands any peace agreement for Ukraine should come with a “US backstop” to prevent future Russian incursions. • Higher US Treasury yields and hawkish tone of Fed policymakers maintain the US Dollar strong, exerting pressure on GBP/USD. • Fed Governor Michelle Bowman cautions against ongoing inflation risks, proposing additional data should be seen before cuts in interest rates. GBP/USD comes under selling pressure, falling around 1.2600 as market participants look forward to pivotal UK labor market information. The anticipated increase in unemployment and claimant count might act as a drag on the British Pound. In the meantime, UK Prime Minister Keir Starmer stressed the importance of a “US backstop” in any peace deal for Ukraine to discourage further Russian aggression. Conversely, the US Dollar strengthens as Treasury yields rise, buoyed by dovish comments from Fed officials. Fed Governor Michelle Bowman cautioned that inflation risks remain, indicating that more clarity is required before rate cuts can be considered. These together form the near-term direction for GBP/USD. GBP/USD falls close to 1.2600 as markets await UK labor figures, where unemployment is anticipated to increase. Meanwhile, the US Dollar firm up due to higher Treasury yields and dovish stance of Fed officials regarding inflation. UK PM Keir Starmer’s demand for a “US backstop” in peace negotiations for Ukraine brings in geopolitical risk. • The duo falls to around 1.2600 prior to the highly important UK labor market numbers, snapping its five-day success run. • The jobless rate is expected to climb to 4.5%, while the claimant count should increase by 10K, which will influence GBP sentiment. • UK PM Keir Starmer emphasizes that any peace agreement for Ukraine must be accompanied by a “US backstop” to prevent Russian aggression in the future. • The US Dollar Index (DXY) bounces back on the back of surging Treasury yields and hawkish Fed comments, putting pressure on GBP/USD. • Fed Governor Michelle Bowman reiterates ongoing inflation threats, emphasizing added clarity is necessary before rate cuts are on the cards. • Investors hold back following Fed Governor Waller’s concession of slower inflation gains, adding to doubt on monetary policy action. • Geopolitical tensions and economic uncertainty propel GBP/USD volatility, and investors are focusing intently on forthcoming data announcements. GBP/USD has declined close to 1.2600 prior to the release of UK labor market data, bringing an end to its five consecutive days of advances. Investors closely observe the job numbers, which are anticipated to increase the unemployment rate to 4.5% and to grow the claimant count by 10K. A weaker-than-expected labor market could weigh further on the British Pound, adding to its recent decline. Meanwhile, UK Prime Minister Keir Starmer emphasized the need for a “US backstop” in any Ukraine peace deal to prevent future Russian aggression, adding a geopolitical dimension to market sentiment.  GBP/USD Daily Price Chart TradingView Prepared by ELLYANA On the American side, the Dollar is strengthening on the back of rising Treasury yields and cautious comments from Federal Reserve officials. The US Dollar Index (DXY) has risen after three consecutive days of decline as 2-year and 10-year Treasury yields are at 4.27% and 4.51%, respectively. Fed Governor Michelle Bowman has cautioned that inflation risks are still high and cautioned against moves to cut rates before more clarity is evident. In the same vein, Fed Governor Christopher Waller recognized sluggish progress in curbing inflation, cementing doubt about future policy action. All these factors combined point to GBP/USD’s bearish risk as investors wait for crucial economic indicators. TECHNICAL ANALYSIS GBP/USD is confronted with short-term support around the 1.2600 psychological mark, with a further drop possibly challenging the 1.2570 and 1.2530 support levels. A fall below these levels may create room for a more significant pullback to 1.2500. On the positive side, resistance is observed at 1.2650, followed by the recent high at 1.2700. The Relative Strength Index (RSI) is also turning down, reflecting bearish momentum, while the 50-day moving average at 1.2620 may serve as a dynamic resistance. Traders will be observing if GBP/USD can maintain above crucial support levels or continue its downside move in the face of fundamental pressures.  FORECAST If the UK labor market data surprises positively, showing resilience in employment figures, GBP/USD could regain strength. A better-than-expected jobs report might boost investor confidence in the British economy, pushing the pair towards the 1.2650 resistance level. If buying momentum continues, the next upside target would be 1.2700, followed by 1.2750, where significant resistance lies. Also, any dovish indications from the Federal Reserve for upcoming rate cuts may bring down the US Dollar, which will help propel a GBP/USD recovery. Conversely, if UK jobs data fail to impress with rising unemployment and an increased claimant count, GBP/USD may witness selling pressure. A fall below the important 1.2600 support could see further declines towards 1.2570 and 1.2530. Further, a more hawkish US Dollar, fueled by Fed hawkish commentary and an increase in Treasury yields, may hasten the losses. Should bearish pressure continue, GBP/USD might fall to the 1.2500 psychological support, testing 1.2450 in a protracted downtrend.

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Currencies GBP/USD

GBP/USD Struggles Below 50-Day SMA: Vulnerable to Further Decline Amid USD Strength

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  • February 10, 2025
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GBP/USD maintains its weakness near the 1.2400 level, with the pair still unable to gain intraday ground as the US Dollar continues its strength. The currency pair is under headwinds as the Federal Reserve and the Bank of England diverge in their outlooks. The Fed will likely keep rates steady due to strong US employment data and growing inflation concerns as a result of Trump’s tariff policies. Technically, repeated failures near the 50-day SMA suggest a bearish bias, and the downside risks are increasing below the 1.2375 support. Any rebound towards 1.2500 may face selling pressure, while a breakdown below 1.2300 could accelerate losses toward mid-1.2200s and beyond. KEY LOOKOUTS • The 1.2500 psychological level remains a strong resistance; a decisive breakout could trigger further gains toward 1.2575-1.2600 in the near term. • Persistent failures near the 50-day SMA indicate a bearish trend, suggesting that any upside attempt may face strong resistance and selling pressure. • The GBP/USD is still limited from a meaningful recovery and a decline in its downward movements as a stronger US Dollar continues, spurred by the threat of Trump’s tariffs and Fed’s stable rate stance. • A convincing breakdown below the support zone 1.2375-1.2370 would accelerate losses toward the 1.2300 round number and further below mid-1.2200s. The GBP/USD remains vulnerable and struggles to hold ground above 1.2400, as the bearish pressure mounts below the 50-day SMA. A stronger US Dollar, given the tariff policies of Trump and the steady rate outlook from the Fed, is limiting any meaningful upside. The key resistance at 1.2500 remains a ceiling, and thus an important level to be reclaimed by bulls. The downside is potentially accelerated toward the 1.2300 mark if a support zone around 1.2375 is breached, with additional downside potential stretching into mid-1.2200s. Traders are looking for a major US economic data and BoE policy signals flow to catch fresh momentum. GBP/USD is suffering below the 50-day SMA, with 1.2500 acting as a strong resistance bar; if it breaks below 1.2375, another fall towards 1.2300 can be expected. US Dollars are gaining across Fed policies and due to Trump’s continued toughness on tariffs, making the pair vulnerable. • Repeated failures near the 50-day SMA indicate a bearish bias, keeping the pair vulnerable to further declines. • Any rebound faces strong resistance at 1.2500; a breakout above this level could signal a potential trend reversal. • A decisive break below this key support zone may accelerate losses toward 1.2300 and mid-1.2200s. • The USD remains strong due to Fed’s rate outlook and Trump’s tariff policies, limiting GBP/USD upside potential. • The economy growth warning from the Bank of England is a major factor continuously straining the GBP with higher downside risks. • Additional strength in US employment and inflation concerns can further help support the Dollar and weigh on the GBP/USD. • Global risk appetite, geopolitical news, and various economic data are likely to drive the next move of the GBP/USD pair. The GBP/USD remains in selling pressures, as it fails to break above the 50-day simple moving average, which forms a very strong resistance. Now, the psychological level of 1.2500 acts as a big barrier for the pair, and unless the pair decisively breaks above that, any move northward will likely face selling pressure. On the downside, immediate support lies around 1.2375-1.2370, and a break below this zone could accelerate losses towards the 1.2300 round figure, with further downside potential extending to mid-1.2200s. The Bank of England’s cautious economic outlook and subdued market confidence in the UK economy add to the bearish sentiment, keeping the pair vulnerable. GBP/USD Daily Price Chart TradingView Prepared by ELLYANA The US Dollar is firm because of the positive employment data and expectations that interest rates by the Federal Reserve are going to remain steady. Additionally, new policies on tariffs introduced by Trump have further added fuel to the fire of inflationary concerns, which could support the USD and cap the recovery of GBP/USD. Market sentiment and risk appetite will be other important factors to determine the direction of the pair. Traders should closely watch upcoming US economic data releases and any shifts in the Fed-BoE policy divergence for fresh trading cues. Until GBP/USD breaks above its key resistance zones, the path of least resistance appears to be downward. TECHNICAL ANALYSIS GBP/USD remains bearish as it struggles below the 50-day Simple Moving Average (SMA), reinforcing selling pressure. The pair is facing stiff resistance at the 1.2500 psychological level, and only a decisive break above this could trigger further upside towards 1.2575-1.2600. On the downside, immediate support is seen at 1.2375-1.2370, and a sustained break below this zone could accelerate declines toward 1.2300 and mid-1.2200s. The overall setup favors bears, with momentum indicators like RSI and MACD tilting towards further downside. Until the pair recovers its key resistance, selling on rallies is a good strategy. FORECAST GBP/USD is likely to rally if it breaks decisively above the key resistance at 1.2500. A break above that area could propel a bullish move to the 1.2575-1.2600 region, where another resistance barrier awaits. If momentum continues, the pair may surge further toward 1.2645-1.2650, and challenge the 100-day SMA around 1.2715-1.2720. A shift in market sentiment, positive UK economic data, or signs of a more hawkish Bank of England (BoE) stance could provide additional fuel for the recovery. GBP/USD remains vulnerable as long as it trades below the 50-day SMA, with immediate support at 1.2375-1.2370. A breakdown below this level could intensify selling pressure, pushing the pair toward the 1.2300 round figure. If the bearish momentum continues, the next strong support will be seen at mid-1.2200s, and then the 1.2175 area. The strengthening US Dollar, due to solid rate outlook of the Federal Reserve and Trump’s tariff policies, will continue to cap the upside, and this makes the GBP/USD vulnerable to deeper losses.

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Currencies GBP/USD

GBP/USD Price Analysis: Key Levels to Watch Amid Renewed USD Strength

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  • January 27, 2025
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GBP/USD is trading under pressure around 1.2450 in the early European session on Monday, weighed down by renewed demand for the safe-haven US Dollar. Despite the dip, the pair maintains a bullish outlook above the 100-period Exponential Moving Average (EMA) on the 4-hour chart, supported by a positive RSI reading of 64.70. Immediate resistance is seen at the 1.2500-1.2510 zone, and a break above could target 1.2551 and 1.2607. On the downside, key support is seen at 1.2350, and a breach of this level opens the door to further declines toward 1.2250 and 1.2160. Traders are advised to watch these levels for breakout or reversal signals. KEY LOOKOUTS • The 1.2500-1.2510 level, which marks a confluence with the upper Bollinger Band and psychological resistance. A breakout might open the way towards 1.2551 and 1.2607. • The 1.2350 mark, coupled with support from the 100-period EMA, is an important barrier on the downside. A penetration could lead to additional falls to 1.2250 and 1.2160. • The RSI hovering above the midline at 64.70 supports the bullish outlook. Sustained strength in this zone indicates further upside potential in the near term. • GBP/USD remains within Bollinger Band boundaries. Any decisive move beyond the upper or lower band could indicate heightened momentum for bullish or bearish trends. GBP/USD remains under selling pressure around 1.2450 during Monday’s early European session, influenced by renewed demand for the safe-haven US Dollar. Despite this, the pair maintains a bullish outlook, staying above the 100-period Exponential Moving Average (EMA) on the 4-hour chart. The Relative Strength Index (RSI) at 64.70 further supports the potential for upward momentum. Key resistance is seen at the 1.2500-1.2510 zone, with a break above potentially targeting 1.2551 and 1.2607. On the downside, the crucial support level at 1.2350 aligns with the 100-period EMA, and a breach of this could lead to further declines toward 1.2250 and 1.2160. GBP/USD trades near 1.2450, amid fresh US Dollar strength. The pair is still bullish above the 100-period EMA but present critical resistance at the 1.2500-1.2510 level, and today important support is at the 1.2350. •GBP/USD trades near 1.2450 in the morning European session under strong selling pressure from renewed interest for the US Dollar. •The pair holds above the 100-period EMA in the 4-hour chart and therefore a bullish perception is ensured. • The RSI is still above the midpoint at 64.70 and susceptible to more upward movement. • The psychological level and the level of the top Bollinger Band boundary is at 1.2500-1.2510. • If the price reaches 1.2510 level, then it could move to 1.2551 and further to 1.2607 as seen in the high of January 6 and December 30. • The 100-period EMA is also at 1.2350 level, and thus this is very crucial support for the currency pair. • A drop below 1.2350 could open up more losses to 1.2250 and 1.2160, the lower Bollinger Band and January 20 low. GBP/USD is trading around 1.2450 in early Monday’s European session, weighed down by the re-emergence of safe-haven demand for the US Dollar. Despite selling pressure, the pair remains positive, staying above the 100-period Exponential Moving Average on the 4-hour chart. The Relative Strength Index at 64.70 is also pointing to the upside, while a further resistance level is seen at 1.2500-1.2510, the upper Bollinger Band, and the psychological level. Higher action would be seen if the pair were to make a decisive breakout at this point toward 1.2551 and 1.2607, both these had acted as highs in January 6 and December 30 respectively. GBP/USD Daily Chart TradingView Prepared by ELLYANA On the flip side, the critical support lies at 1.2350, which is supported by the 100-period EMA. A break of the latter can send GBP/USD even lower to target 1.2250, then 1.2160, which serves as the lower Bollinger Band and marks the January 20 low. Traders must be very vigilant about those levels and look for a breakout or reversal signal there. The overall technical aspect is positive so long as the pair is maintained above the crucial support levels. The RSI supports the bullish aspect, at least for now. TECHNICAL ANALYSIS The price action of GBP/USD exhibits a bullish direction, as it sustains trading above the 100-period Exponential Moving Average on the 4-hour chart, which indicates powerful bullish momentum. Relative Strength Index, currently at 64.70, indicates that there will be continued buying. The Bollinger Bands are bringing the pair toward the upper boundary near the key resistance zone of 1.2500-1.2510, which is a psychological level. If the pair can break above this resistance, it will propel it toward the next upside targets at 1.2551 and 1.2607. The downside critical support lies at 1.2350, where the 100-period EMA gives a strong defense. A breakdown of this support could bring further declines targeting 1.2250 and 1.2160. From a technical analysis perspective, the outlook appears positive, and key levels will be watched for breakouts or reversals. FORECAST The GBP/USD pair is seen bullish as it stays above the 100-period Exponential Moving Average (EMA) on the 4-hour chart. Relative Strength Index at 64.70 further supports positive momentum and, therefore, possible upward movement. The immediate resistance on the psychological area is seen between 1.2500 and 1.2510 also in line with the upper Bollinger Band; a successful breakthrough above this range could take it to 1.2551; the high is seen on January 6, and towards 1.2607 high on December 30, 2024. At these levels one finds the bulls’ next major test for continued rallies in the shorter term. On the negative side, the critical support level is at 1.2350, which also aligns with the 100-period EMA. A break below this level could weaken the bullish case and expose GBP/USD to further declines. Next key support levels to watch are 1.2250, near the lower Bollinger Band, and 1.2160, the low of January 20. These levels will be important for gauging the strength of bearish pressure if the pair is unable to stay above 1.2350. Traders should monitor

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Currencies GBP/USD

GBP/USD Edges Lower Toward 1.2300 Amid Resurgent US Dollar and Trade War Fears

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  • January 22, 2025
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GBP/USD has reversed its two-day rally and is heading toward 1.2300 as the US Dollar regains strength on heightened safe-haven demand. The pair’s decline follows renewed concerns over potential trade wars under the Trump administration, with threats of tariffs on China, Mexico, and Canada weighing on market sentiment. Meanwhile, disappointing UK labor market data, including a rise in unemployment and slower employment growth, have added pressure on the British Pound. Despite Monday’s sharp rally fueled by USD weakness during the Martin Luther King Jr. holiday, the pair now struggles to maintain momentum. Technical indicators signal bearish sentiment, with immediate support at 1.2230 and resistance at 1.2300. KEY LOOKOUTS • GBP/USD slips toward 1.2300 as the US Dollar regains momentum on trade war concerns. • UK labor data disappoints with rising unemployment and slower wage growth. • Technical indicators suggest bearish momentum, with key support at 1.2230 and resistance at 1.2300. • US market sentiment and Wall Street performance may further impact the pair’s trajectory. GBP/USD continues moving lower toward 1.2300, due to a rising US Dollar amid growing fears of a full-scale trade war and weak data on the UK labor market. The pair had its latest dip driven by renewed safe-haven demand for the dollar following the new round of Trump’s tariffs threats against China, Mexico, and Canada. Additionally, disappointing UK employment figures, including a rise in the unemployment rate to 4.4% and slowing wage growth, have further dampened the Pound’s resilience. Technical indicators point to bearish momentum, with immediate support at 1.2230 and resistance near 1.2300, as traders closely monitor US market sentiment for further directional cues. GBP/USD is trending lower towards 1.2300 as the USD is gaining strength with fears of the trade war, weak UK labor data, and also due to some bearish technical signals that could see further downsides. • The pair has been trending lower towards 1.2300 after a two-day rally led by a resurgent US Dollar. • Safe-haven demand for the greenback rises amid growing trade war fears and tariff threats by the Trump administration. • Disappointing data shows unemployment edging higher to 4.4%, with wage growth slowing and employment changes sharply declining. • The US considers tariffs on China, Mexico, and Canada, fueling uncertainty and boosting the Dollar. • Bearish momentum is reflected in the Relative Strength Index (RSI) and key support at 1.2230, with resistance near 1.2300. • GBP/USD erased Monday’s 1.3% gain, losing 0.6% by Tuesday, highlighting a volatile trading pattern. • US equity and bond markets, as well as Wall Street, are integral to the analysis of further market moves in GBP/USD. GBP/USD continues downwards, falling into the 1.2300 region as the Greenback gains upward momentum on higher safe-haven money flows. Inflationary anxiety has returned amid growing trade-war fears, thanks to the prospect of tariffs proposed by the White House against Beijing, Mexico City, and Ottowa, the latter two because of their “abuse of our country,” according to President Trump. Disappointing UK labour market data has been weighing on the British Pound lately. The unemployment rate edged up to 4.4%, while wages growth slowed down, and the employment gains reduced sharply, decreasing the Pound’s ability to keep up with the Dollar’s gain. This was enough to take the wind off the sails of GBP/USD’s recent upswing, having rocketed sharply 1.3% higher Monday. GBP/USD Daily Price Chart. Source: TradingView Prepared By ELLYANA Meanwhile, bearish momentum dominates, as reflected in the Relative Strength Index (RSI) slipping toward 50 after reaching 70 earlier this week. Key support levels are identified at 1.2230 and 1.2200, while resistance is seen at 1.2300 and 1.2350. Traders are closely watching US market sentiment, as Wall Street’s performance could further influence the pair’s direction. There is little major economic data to be released from the US in the short term, but geopolitical events and announcements regarding tariffs are going to drive things, and that could either help support the Dollar’s haven appeal or provide some respite for GBP/USD. TECHNICAL ANALYSIS GBP/USD clearly continues to demonstrate bearish momentum as it falls towards the 1.2300 level. On the 4-hour chart, Relative Strength Index (RSI) dropped from overbought territory close to 70 into neutral 50 to lose any positive strength. Significant supports are now marked at 1.2230, with both the 20-period and 50-period SMAs meeting at that point. Another strong support point would be the level of 1.2200 followed by a point of static 1.2160. On the upside, immediate resistance lies at the 1.2300 psychological level, with further hurdles at 1.2350, coinciding with the 100-period SMA, and 1.2370, aligning with the 38.2% Fibonacci retracement of the recent downtrend. The pair’s inability to hold above the 1.2300 mark suggests continued downside risks unless a significant catalyst emerges to revive bullish sentiment. FORECAST GBP/USD could see an upside recovery if market sentiment improves or if the US Dollar weakens due to a shift in geopolitical or economic factors. Positive developments, such as a resolution to trade tensions or better-than-expected UK economic data, could bolster the Pound. Breaking through immediate resistance around 1.2300, and then reaching to 1.2350 (where lies the 100-period SMA) with the potential upside targeting 1.2370 in line with the 38.2% Fibonacci retracement of the latest downtrend could be possible after a breach through above this level for quite some time as it can suggest a turning of the bears around and possibly increased demand. On the downside, GBP/USD remains vulnerable to further losses, particularly if the US Dollar strengthens due to safe-haven demand amid escalating trade war fears. Weakness in UK economic data, such as rising unemployment or slowing wage growth, could exert additional pressure on the pair. A clear break lower to 1.2230 support, where the 20-period and 50-period SMAs meet, would widen opportunities for a drop down to 1.2200 and 1.2160. The extent of the decline will be exacerbated if bearish momentum continues since lower GBP/USD levels are possible during a bearish trend, especially with no positive cues or change in market mood.

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Currencies GBP/USD

GBP/USD Under Pressure Below 1.2200 After Soft UK Inflation Data

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  • January 16, 2025
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GBP/USD is under pressure, trading around 1.2220 after two days of gains, following softer-than-expected inflation data from the UK. The Consumer Price Index (CPI) for December showed a smaller-than-anticipated increase, which could provide the Bank of England with room to cut interest rates in February. As such, the Pound faces headwinds, especially against a weakening USD, despite lower-than-expected US Producer Price Index (PPI) figures. Technically, GBP/USD remains above the 23.6% Fibonacci retracement level but needs a sustained break above the 1.2240 resistance to regain bullish momentum. However, a drop below 1.2200 may trigger further downside towards 1.2150 or even 1.2100, especially if US inflation data later in the week influences market expectations for Federal Reserve policy. KEY LOOKOUTS • Readings could pave the way for potential interest rate cuts by the Bank of England, weighing on the Pound’s strength against the USD. • To maintain the momentum, GBP/USD needs to break above 1.2240 resistance and then target 1.2280 and 1.2300. • US Consumer Price Index is going to play a significant role in determining the Federal Reserve rate outlook, thus affecting USD dynamics and GBP/USD price action. • Optimism over US trade policies and ease concerns over the Fed rate cuts could cap the further USD weakness and give some support to the GBP/USD pair. GBP/USD major key watch items would be UK inflation data that will impact the decision of interest rate cuts from the Bank of England, putting even more pressure on the Pound. Technically, the pair faces resistance around 1.2240, and a break above this level could take it towards 1.2300. Additionally, the US Consumer Price Index report that is due out soon will be crucial in forming expectations for Federal Reserve policy, which may influence the strength of the USD. Finally, the overall market sentiment about US trade policies and economic conditions will also determine the short-term direction for GBP/USD. The immediate direction of the GBP/USD would depend on the UK inflation report, possible rate cuts by the BoE, technical resistance around 1.2240, and US CPI. • Softer-than-expected CPI data in December might provide the BoE with space to cut interest rates, hurting the Pound. • The pair is resisting at around 1.2240; a sustained break above this point could take the pair towards 1.2300 and other higher Fibonacci levels. • US PPI data was weak, which contributed to a softer USD in the short term. • The US Consumer Price Index (CPI) release will be important in shaping expectations for the Federal Reserve’s interest rate policy. • Optimism over US economic conditions and easing trade concerns could provide support to the USD, limiting further Pound gains. • The 23.6% Fibonacci retracement level at 1.2200 is critical, and there is a potential for further upward movement if GBP/USD can break above 1.2240. • The daily RSI for GBP/USD has started to show signs of being oversold, which might suggest a bounce near key support levels like 1.2150-1.2100. GBP/USD is under pressure as softer-than-expected UK inflation data increase the chances of possible interest rate cuts by the Bank of England. Consumer Price Index for December came in at 2.5% below expectations, and that has led to concerns whether the UK economy may indeed be easing inflationary pressures, especially concerning stagflation risks. The pair is technically holding above the 23.6% Fibonacci retracement level at 1.2200; however, much upside remains dependent upon a clear break above the resistance zone at 1.2240. The US Consumer Price Index for April will also determine the way ahead for Federal Reserve monetary policy and USD movements in the coming weeks. A less-than-expected print on CPI would further keep USD pressure low, but a better print would likely increase the chances of a strengthening dollar. Improved US economic conditions as trade tension issues ease should add to support the USD as well. Traders will be focusing closely on both US and UK data flows in the next days, which will probably decide the major market moves for the GBP/USD in the near future. TECHNICAL ANALYSIS From a technical view point, GBP/USD is holding above the short-term support at the 23.6% Fibonacci retracement level at 1.2200. A break above the 100-hour Exponential Moving Average (EMA) at 1.2240 can sustain higher, where 1.2280 represents a possible area on the 38.2% Fibonacci level. Further strength might take the price to the 1.2300 region and the 1.2315 resistance area. If the price drops below 1.2200, some of the significant support levels include 1.2150-1.2140 and then 1.2100. A clear violation below 1.2100 would most probably establish a continuation of the broader trend, leaving it open to a further drop. GBP/USD Daily Price Chart Sources: TradingView, Prepared By ELLYANA. FORECAST If GBP/USD breaks above the immediate resistance at 1.2240 (100-hour EMA), then it could make its way toward the next key resistance at 1.2280, which also coincides with the 38.2% Fibonacci retracement level. Further up, the pair may push toward 1.2300, followed by the 1.2315 resistance zone. A strong break above 1.2315 may signal a potential rally toward the 50% Fibonacci level at 1.2335, further extending gains. On the negative side, if GBP/USD cannot sustain a rally above 1.2200, then a move below that support may find the next strong support in the region of 1.2150-1.2140. A breach of that zone may see 1.2100 in the near future. Once 1.2100 falls, then recent lows might be seen, thus continuing the major downtrend and bringing possible targets in the vicinity of 1.2050 or even 1.2000.

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