The GBP/USD currency pair is trading defensively around 1.2675 during the Asian session on Friday. The sentiment remains negative as the pair continues to sit below the crucial 100-period Exponential Moving Average (EMA). This technical positioning, coupled with a bearish Relative Strength Index (RSI), indicates sustained downward pressure. Key resistance is identified at 1.2720, while the first significant downside target stands at 1.2618.
As the GBP/USD pair hovers near 1.2675, this represents its lowest point since August. The decline has been exacerbated by cautious comments from the Federal Reserve’s Chair, Jerome Powell, and an overall rise in the US Dollar driven by robust economic data. Market participants are anticipating the preliminary release of the UK Gross Domestic Product (GDP) for the third quarter, which is scheduled for today and may further influence the currency pair’s trajectory.
From a technical perspective, the daily chart for GBP/USD suggests a bearish outlook as the pair remains consistently below the key 100-period EMA. The propensity appears to lean towards further declines, especially with the RSI languishing below the neutral midpoint at approximately 33.50.
If the current bearish trend continues, the pair could potentially reach the lower limit of the Bollinger Band near 1.2618. A break below this level may trigger a deeper decline towards the psychological barrier of 1.2500, with subsequent support positioned at 1.2467, marking the low from May 8.
Conversely, should the pair find buying interest, the initial resistance to monitor would be at 1.2720, correlating with the high observed on November 14. A breakout above this level could lead to further gains, opening the door for potential tests of 1.2873 and, subsequently, 1.2955, aligning with the 100-period EMA.
