The GBP/USD pair continues to experience bearish pressure, trading around 1.2697, with declines influenced by recent hawkish comments from BoE’s Catherine Mann, which the market largely overlooked in light of a strong US Dollar. This downside momentum is reinforced by recent US inflation data, which aligned with expectations and sustained USD strength. The pair is currently down approximately 0.37% on the day.
Key Technical Levels:
- Immediate Support at 1.2665:
- The GBP/USD downtrend extended past the 200-day Simple Moving Average (SMA) at 1.2817, a bearish signal that opens the door for further declines.
- The pair found an intraday low at 1.2686, close to the August 8 swing low of 1.2665. This level is a critical short-term support, and a decisive break below could lead to a test of 1.2600, a psychological and technical support.
- Resistance at 1.2700 and 1.2873:
- On the upside, if buyers manage to reclaim the 1.2700 level, the next target would be around the November 12 high at 1.2873.
- A close above 1.2873 could potentially alter the bearish outlook, but with current momentum favoring sellers, this level may be challenging to reach in the near term.
- Technical Indicators:
- The Relative Strength Index (RSI) shows bearish momentum, indicating that sellers maintain control and downside pressure remains strong.
Outlook:
With a strong USD supported by US inflation data and limited impact from BoE’s hawkish stance, GBP/USD may continue its downtrend in the near term. The pair faces key support at 1.2665 and could see further losses toward 1.2600 if sellers persist. A reversal above 1.2700 would be necessary for a bullish shift, but given current sentiment, GBP/USD is likely to remain under pressure in the near term.
