The GBP/USD pair dropped below the 20-day moving average (DMA) as sellers gained near-term control, with the Relative Strength Index (RSI) approaching a critical level. Key support levels lie at 1.3044, 1.2995, and 1.2894, while buyers need to hold above 1.3150 for a potential recovery towards resistance at 1.3111 and 1.3200.
During the North American session, the Pound Sterling fell by 0.30% due to UK economic slowdown and US inflation concerns, leading to GBP/USD trading at 1.3035 after hitting a daily high of 1.3111.
Technical Outlook and Potential Scenarios
The current uptrend remains intact, but the drop below the 20-DMA gives sellers an advantage in the short term. The RSI, although still bullish, is approaching the 50-neutral line, which could trigger further downside pressure.
If the pair breaks below 1.3050, it could target support levels at 1.3044, 1.2995, and 1.2894. On the upside, holding above 1.3150 may lead to a recovery towards resistance at 1.3111, 1.3150, and potentially 1.3200.
GBP/USD Price Action – Daily Chart
Analysis and Implications for Traders
The recent drop in GBP/USD below the 20-DMA indicates a shift in short-term momentum towards sellers. Traders should closely monitor key support levels at 1.3044, 1.2995, and 1.2894 for potential downside targets. On the other hand, a recovery above 1.3150 could signal a reversal towards resistance levels at 1.3111, 1.3150, and 1.3200.
Understanding these technical levels and market dynamics can help traders make informed decisions and manage their risk effectively in the GBP/USD currency pair.