GBP/USD is currently trading in a narrow range below the 1.2550 level during the European morning session on Tuesday. After experiencing slight losses on Monday, the pair faces challenges in finding a clear direction as trading volumes are low and the Christmas holiday approaches.
The US Dollar maintained its position on Monday, yet it found it difficult to gain momentum due to a mixed bag of economic news from the United States. Durable Goods Orders were reported to have declined by 1.1% month-over-month in November, which was notably worse than economists’ forecasts of a 0.4% decrease. Additionally, the Conference Board’s Consumer Confidence Index fell to 104.7 in December, down from 112.8 in November, indicating a decline in consumer sentiment. Conversely, New Home Sales showed a positive shift, increasing by 5.9% in November following a significant drop of 14.8% the previous month.
Looking ahead, the economic calendar appears quiet, with no major data releases expected until Thursday. U.S. financial markets will operate for a half-day on Tuesday and will remain closed on Christmas Day on Wednesday, contributing to subdued trading activity.
In terms of technical analysis, the Relative Strength Index (RSI) for GBP/USD is hovering below the neutral level of 50, and the exchange rate is slightly below the 20-period Simple Moving Average. This suggests a prevailing bearish sentiment, albeit lacking strong momentum. Should 1.2550 prove to be a persistent resistance level, it may attract technical sellers. In that case, potential support levels could emerge at 1.2480 and 1.2400. On the upside, if the pair gains traction, levels to watch for resistance are situated around 1.2600 to 1.2610 and at 1.2670.
