The GBP/USD currency pair continues to experience pressure, trading around 1.2480 during the Asian session on Wednesday. This follows a period of losses that reflects a bearish sentiment in the market. Current technical analysis suggests that although the pair is positioned above the upper boundary of a descending channel, a sustained downturn remains possible due to the Relative Strength Index (RSI), which remains firmly below the neutral 50 threshold. As it stands, the immediate resistance lies at the nine-day Exponential Moving Average (EMA) around 1.2494.
Looking ahead, there is potential for GBP/USD to test the resistance near 1.2560, which could signal a re-entry into the descending channel. Such a reversal would likely reinforce the existing bearish bias, potentially pushing the exchange rate towards the nine-month low of 1.2352, last recorded on January 2. A further decline could see the pair approach the next support level at 1.2299, a level unseen since November 2023 and touched on April 22.
On the other hand, if GBP/USD manages to break above the resistance levels presented by the nine-day EMA and the subsequent 14-day EMA at 1.2516, it could indicate a shift in market sentiment. A successful move through these critical levels may energize the pair and open the possibility of reaching for a two-month high of 1.2811, which was last noted on December 6.
In conclusion, the GBP/USD pair is at a critical juncture. Traders will closely monitor the key resistance levels and the ongoing bearish pressure conveyed through various technical indicators. The outcome of this situation could shape the currency’s trajectory in the near future.
