GBP/USD Struggles Near Key 1.2900 Barrier as Large Option Expiry Caps Upside
Technical Analysis:
GBP/USD continues to hover near the psychologically significant 1.2900 level after stalling at intraday resistance around 1.2929, a level matching Wednesday’s Asian-session low recorded prior to disappointing UK CPI data. The pair’s latest recovery from an Asian session trough at 1.2872 highlights modest demand near recent two-week lows, though bullish momentum remains tentative. Adding technical gravity is a substantial £1 billion options expiry positioned precisely at 1.2900, exerting pressure on price action as the New York cut approaches.
Immediate technical resistance remains firmly established at 1.2929; a convincing break above this pivot would be required to signal renewed bullish intent, targeting subsequent resistance at the 10-day moving average near 1.2955. Above this point, bulls could aim for the recent high around 1.2974 and ultimately test the critical March peak at 1.3015. Conversely, a sustained move below 1.2900, influenced by lingering tariff-related risks and heightened volatility from equity markets, would shift short-term momentum back toward bearish territory, retesting intraday lows at 1.2872 and potentially deeper supports near the rising 21-day moving average at 1.2850.
The technical landscape remains delicately balanced, underscored by fundamental uncertainties such as ongoing UK-U.S. tariff discussions and potential instability in global equity markets. A deeper correction in equities could prompt significant risk-aversion flows into the USD, pushing cable sharply lower and potentially breaching critical near-term support at 1.2850, thus risking an acceleration toward stronger long-term support near 1.2750. As a result, traders remain vigilant for signals from stock market movements, which could trigger sudden adjustments in risk sentiment, significantly impacting GBP/USD’s near-term trajectory.