GBP/USD Outlook: Struggles Below Resistance
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The GBP/USD pair is trading near 1.2640 in the early European session, breaking a three-day losing streak but remaining confined within a descending channel. The technical setup indicates continued bearish pressure, with short-term price action remaining subdued.
Technical Overview
Descending Channel: GBP/USD remains below the upper boundary of the descending channel, reinforcing the bearish structure.
Exponential Moving Averages (EMA): The pair trades below the nine-day EMA at 1.2684 and the 14-day EMA, signaling weak short-term momentum.
Relative Strength Index (RSI): The 14-day RSI hovers below the 50 mark, strengthening the bearish outlook.
Support Levels
Immediate Support: The pair's first line of defense lies at its four-week low of 1.2487, recorded on November 22.
Lower Boundary: A decisive break below 1.2487 could accelerate the downward momentum, targeting the descending channel’s lower boundary at 1.2299, the yearly low reached on April 22.
Resistance Levels
Immediate Resistance: The nine-day EMA at 1.2684 aligns with the channel's upper boundary and acts as immediate resistance. A sustained break above this level could alleviate the bearish sentiment.
Higher Resistance: If the pair breaches 1.2684, it may revisit the five-week high of 1.2811, marked on December 6.
Market Sentiment
The bearish sentiment continues to dominate as economic uncertainties weigh on the Pound Sterling. Traders are focusing on this week’s key events, including the Federal Reserve's interest rate decision and the release of UK inflation and labor market data, which could provide directional cues.
Outlook
The GBP/USD pair remains under bearish control as long as it trades below the descending channel’s upper boundary and the critical EMA levels. While a break above 1.2684 could trigger a short-term recovery, the broader trend remains weak, with the potential for further downside towards the yearly low at 1.2299.
Technical Overview
Descending Channel: GBP/USD remains below the upper boundary of the descending channel, reinforcing the bearish structure.
Exponential Moving Averages (EMA): The pair trades below the nine-day EMA at 1.2684 and the 14-day EMA, signaling weak short-term momentum.
Relative Strength Index (RSI): The 14-day RSI hovers below the 50 mark, strengthening the bearish outlook.
Support Levels
Immediate Support: The pair's first line of defense lies at its four-week low of 1.2487, recorded on November 22.
Lower Boundary: A decisive break below 1.2487 could accelerate the downward momentum, targeting the descending channel’s lower boundary at 1.2299, the yearly low reached on April 22.
Resistance Levels
Immediate Resistance: The nine-day EMA at 1.2684 aligns with the channel's upper boundary and acts as immediate resistance. A sustained break above this level could alleviate the bearish sentiment.
Higher Resistance: If the pair breaches 1.2684, it may revisit the five-week high of 1.2811, marked on December 6.
Market Sentiment
The bearish sentiment continues to dominate as economic uncertainties weigh on the Pound Sterling. Traders are focusing on this week’s key events, including the Federal Reserve's interest rate decision and the release of UK inflation and labor market data, which could provide directional cues.
Outlook
The GBP/USD pair remains under bearish control as long as it trades below the descending channel’s upper boundary and the critical EMA levels. While a break above 1.2684 could trigger a short-term recovery, the broader trend remains weak, with the potential for further downside towards the yearly low at 1.2299.