The GBP/USD currency pairing is currently facing challenges in maintaining the gains it achieved over the prior two days, primarily influenced by a slight resurgence in US dollar strength. Optimism surrounding ongoing US-China trade negotiations has led to increased demand for the dollar, compounded by some market repositioning ahead of the upcoming Federal Open Market Committee (FOMC) meeting. For bearish traders, a substantial break below the 100-period Exponential Moving Average (EMA) on the 4-hour chart is required before considering new positions.
During the Asian trading session on Wednesday, GBP/USD experienced a decline, slipping toward the 1.3400 level. This decrease can be attributed to the modest recovery of the US dollar, which pulled prices down from the mid-1.3300s in recent hours. The pair had earlier demonstrated resilience near the support levels of 1.3250-1.3245, bouncing off the 100-period EMA on the 4-hour chart. Technical indicators on both daily and hourly charts remain in a positive zone, suggesting that any further downturn could be seen as a buying opportunity, particularly as the price hovers around the 1.3300 level.
Nonetheless, a decisive breach beneath the critical support of 1.3250-1.3245 might render the GBP/USD pair vulnerable, potentially initiating a significant corrective movement from the recent highs near the mid-1.3400s — levels not reached since February 2022. In such a scenario, prices could swiftly decline toward the 1.3200 region, with further support anticipated at the 1.3170-1.3165 area, and potentially reaching down to the 1.3100 figure.
Conversely, if the pair manages to maintain momentum beyond the 1.3400 level, it may encounter resistance around the 1.3445 zone, which marks a multi-year peak. A sustained movement surpassing this resistance could act as a catalyst for bullish traders, allowing GBP/USD to target the psychological level of 1.3500. A continued rise may lead to spot prices advancing further toward the 1.3570-1.3575 range and potentially testing the key 1.3600 level.
