GBP/USD bearish sentiment continues on UK CPI news. Price currently testing the 1.2330 major level
The British Pound (GBP) is currently facing headwinds against the US Dollar (USD) due to reduced expectations for aggressive policy tightening by the Bank of England (BoE). This bearish sentiment is compounded by the overall bullishness surrounding the USD. As a result, the GBP/USD pair is in a short-term bearish downtrend, with its price currently testing support levels at 1.2330. Notably, the price is trading below both the 200-day and 50-day moving averages, underscoring the prevailing bearish sentiment in the market.
Traders seem cautious and are adopting a wait-and-see approach, particularly in anticipation of key upcoming events. This includes the release of the latest UK consumer inflation figures and the highly-anticipated FOMC policy decision during the US session. Furthermore, the BoE meeting scheduled for later in the week adds to the uncertainty surrounding the pair’s direction.
In terms of potential price movements, there are two scenarios to consider. In a more bullish scenario, the price could climb higher and test the 1.2408 level, with the possibility of extending gains towards the 1.2429 level. A sustained bullish trend might even lead to a test of the topmost resistance at 1.2467. Conversely, in a bearish scenario, the price may decline from its current levels, finding initial support at 1.2364. Should this support level fail to hold, there is potential for further downside towards 1.2320 and 1.2280, with 1.2280 serving as a significant support level.
The short-term momentum for the GBP/USD pair is currently down, indicating a bearish bias. The Relative Strength Index (RSI) also signals oversold conditions, suggesting the potential for a reversal or consolidation in the near term. In terms of the broader trading range, the market is expected to fluctuate between 1.2320 and 1.2565 levels, and it’s crucial for traders to closely monitor price reactions within this range for potential trading opportunities.
In summary, the GBP/USD pair is currently facing bearish pressures due to less aggressive expectations from the BoE and the overall strength of the USD. Traders should remain vigilant, especially around key support and resistance levels, as these could play a significant role in determining the pair’s future direction. The oversold RSI indicates the possibility of a reversal, but market participants should exercise caution and consider the impact of impending economic events and central bank decisions on price dynamics in the coming days.
Key Levels to watch are 1.2467,1.2523,1.2430,1.2565,1.2391,1.2320