The GBP/USD currency pair experienced a decline, trading around 1.3005 during the early hours of Wednesday’s European session. This downward trend remains firmly in place as the pair trades below the key 100-period Exponential Moving Average (EMA). Traders are keeping a close eye on the upcoming UK Autumn Budget for 2024, which marks the first significant budget presentation by the Labour government in nearly 15 years. Analysts suggest that a budget focused on austerity paired with strategies to encourage long-term investment could be beneficial for the pound, potentially enhancing the UK’s growth outlook.
On the four-hour chart, the GBP/USD maintains a bearish sentiment, reinforcing concerns about further declines. However, the Relative Strength Index (RSI) is hovering just above the midline at approximately 57.60, indicating that there may still be potential for a short-term recovery.
The lower boundary of the Bollinger Band, situated at 1.2943, serves as an initial support level for the GBP/USD pair. A move below this threshold could expose further downside toward the 1.2910 to 1.2900 range, which reflects the low observed on October 24 and represents a significant psychological support level. A more substantial support area can be found at 1.2813, corresponding to the low from August 14.
Conversely, the upper band of the Bollinger Band at 1.3016 presents the first resistance point for the currency pair. If the market manages to overcome this level, it could set the stage for a rise towards the 100-period EMA, located at 1.3032. The next resistance level to monitor sits at 1.3071, corresponding to the high recorded on October 18.
