The GBP/USD currency pair has experienced a downward trend after attempts to hold above the 1.2600 level fell short. As the new trading week commenced, the US Dollar faced selling pressure, with the bearish outlook for the pair remaining intact.
Initially, GBP/USD showed positive momentum and surpassed the 1.2600 threshold. However, it struggled to maintain its position and subsequently retreated to the vicinity of 1.2550 during the European morning session. The market reacted to the news of Donald Trump appointing Scott Bessent as his nominee for US Treasury Secretary, which contributed to a noticeable decline in US Treasury bond yields early in the week. Analysts noted that Bessent’s selection might provide a sense of stability and lead to a brief resurgence in Treasury values as concerns about a more unconventional candidate subsided.
The economic calendar for the US offers limited high-impact data releases on Monday, which means that market sentiment will predominantly shape the value of the US Dollar. In the early hours of the European session, US stock index futures showed gains between 0.45% and 0.6%. Should Wall Street open positively and engage in a risk rally, this could lead to further declines in the USD, thereby allowing GBP/USD to regain some upward momentum.
From a technical standpoint, the Relative Strength Index (RSI) on the 4-hour chart has slid below the 40 mark, suggesting that buyers are currently cautious about pushing the Pound higher. Immediate support for the pair is seen at 1.2530, with further critical levels at 1.2500 and 1.2420. Conversely, resistance levels to watch include 1.2600, followed by 1.2635 – 1.2640, and the key milestone of 1.2700.
