During the early European session on Monday, the GBP/USD currency pair experienced a slight decline, trading at approximately 1.2945, representing a 0.11% drop for the day. This downward movement continues to reflect a bearish sentiment as the pair remains positioned below the 100-day Exponential Moving Average (EMA) and the Relative Strength Index (RSI) indicates additional selling pressure.
The recent decline in GBP/USD can be attributed to a stronger US Dollar, influenced by market expectations of a more cautious approach to monetary easing by the Federal Reserve. With no significant economic data expected from either the UK or the US in the near term, fluctuations in the USD are likely to remain a driving force affecting the pair’s performance.
The current technical analysis suggests that the bearish trend holds steady as the pair hovers beneath the pivotal 100-period EMA on the daily chart. The RSI, positioned below the 50-mark at around 37.70, further indicates a continuation of downward momentum, reinforcing the prevailing selling sentiment.
In terms of support levels, the lower boundary of the Bollinger Band sits at 1.2870, marking the first key level to monitor. A decisive movement below this point could trigger further declines, potentially reaching 1.2763, which was last seen on August 13. Below this, the next significant support to watch stands at 1.2665, the low recorded earlier in August.
Conversely, should GBP/USD find upward momentum, the psychological level of 1.3000 serves as the immediate resistance. A breakthrough at this point could pave the way for a positive trajectory towards 1.3071, representing the high from October 18, and later approaching 1.3185, the high seen on September 5.
