GBP/USD Analysis
The GBP/USD currency pair has bounced back from its earlier losses and is currently trading around 1.3450 during Monday’s Asian session. Technical analysis indicates that the pair still has a bearish outlook, as it remains trapped within a descending channel pattern.
The 14-day Relative Strength Index (RSI), which is a momentum indicator, stands at 40 points. This suggests that while bearish pressure continues, it might not be at an extreme level, implying that sellers are still active but haven’t fully capitulated yet.
Short-term trends have also shifted to a slightly negative tone. The price is below its 9-day exponential moving average (EMA), and it appears to be inching closer to a flatter 50-day average, hinting that upward momentum is losing strength.
The first support level is around 1.3350, which is in a reversal zone. Given its proximity to the 50-day EMA, there could be a potential for buying interest near this descending channel, particularly around 1.3140, with a significant low at 1.3010 further down.
If we consider upside potential, an immediate resistance is evident at the 9-day EMA, approximately at 1.3504, followed closely by the 50-day EMA at 1.3518. If the price were to surpass these averages, it might boost momentum, leading it to test the upper boundaries of the descending channel around 1.3630. A breakout beyond this channel could signal a shift toward a bullish sentiment and potentially retest the GBP/USD pair’s peak from January 27 at 1.3869, which is the highest it’s been since September 2021.
