The Pound Sterling (GBP) continued its decline against the US Dollar (USD) on Tuesday, dropping below the 1.2700 mark amid a quiet UK economic calendar and mixed US data. The pair currently trades at 1.2688, down 0.12% for the day.
Technical Outlook: GBP/USD Faces Downside Risks
Despite a brief rebound from a multi-week low of 1.2656, the GBP/USD remains under pressure, trading below a previously broken support trendline that has now turned resistance. This suggests that further downward movement is likely.
The Relative Strength Index (RSI) indicates that selling momentum remains strong, reinforcing the bearish outlook. A break below 1.2700 could accelerate the decline, targeting the June 14 low of 1.2656. If this level fails to hold, the next support lies at the confluence of the 100-day moving average (DMA) and the May 3 high at 1.2643/34, followed by the psychological 1.2600 level.
Potential for a Reversal?
While the current outlook is bearish, a potential reversal could occur if the GBP/USD manages to reclaim the 1.2720/30 area. This could pave the way for a move back towards the 1.2800 mark. However, given the prevailing bearish momentum, this scenario seems less likely in the near term.
