The GBP/USD currency pair is facing renewed pressure as it encounters fresh selling interest, indicating potential for further declines. A recent revival in demand for the US Dollar has contributed to this trend, with market sentiment leaning towards reduced expectations for aggressive interest rate cuts by the Federal Reserve. This scenario heightens the likelihood of a downward trajectory for the GBP/USD pair.
During the Asian trading hours on Tuesday, the GBP/USD experienced a notable drop, approaching the mid-1.2900s. Despite this decline, it remains above the lowest levels recorded since mid-August, suggesting that the US Dollar’s performance will significantly influence future movements. The persistence of selling pressure, combined with rising speculation regarding forthcoming rate cuts by the Bank of England in the upcoming months, signals that the currency pair may continue its downward path.
From a technical standpoint, the repeated inability to breach the significant 1.3000 psychological level, together with a drop below the 100-day Simple Moving Average, reinforces the prevailing bearish sentiment in the market. Oscillator indicators on the daily chart are firmly in negative territory, implying room for further declines. Consequently, a retracement toward the 1.2900 level, or even further back to monthly swing lows, appears increasingly probable.
An extension of the recent downtrend, originating from the 1.3435 region — the highest rate achieved since February 2022 — could see the GBP/USD pair targeting the critical 200-day Simple Moving Average near the 1.2800 level, with interim support around 1.2860. Conversely, should the pair reclaim the 1.3000 level, it might challenge the 1.3050 area, potentially leading to a short-covering rally and pushing prices above 1.3100, towards the 1.3115 – 1.3120 resistance zone. Robust buying momentum from this point could alter the current negative perception, favoring bullish activities in the market.
