The GBP/USD has slipped to 1.2695. It’s facing pressure from a strengthening US Dollar and a ‘death cross’ technical formation.
Key Support and Resistance Levels
The key support levels for GBP/USD are 1.2665 and 1.2605. There’s a further downside risk to the November low of 1.2486. On the upside, resistance is seen near 1.2814/16, where the 50-day and 200-day SMAs meet. It extends to the 100-day SMA at 1.2893.
Impact of UK Inflation and Fiscal Policy
Despite November’s UK inflation data being higher than the previous month, and with expansionary fiscal policy in place, the Pound Sterling has still lost ground against the US Dollar. This situation might stop the Bank of England from cutting rates, yet the UK economy has shown some weakness. The GBP/USD is trading at 1.2695 and has failed to move past 1.2700 firmly.
GBP/USD Price Forecast: Technical Analysis
Downward Pressure
The price movement indicates that continued US Dollar strength could keep weighing on the GBP/USD. The 50-day Simple Moving Average (SMA) has fallen below the 200-day SMA, which confirms the ‘death cross’ formation. This suggests further downward movement. The Relative Strength Index (RSI) also shows that sellers have the upper hand as the RSI is moving lower in the bearish zone.
Support Levels
The first support for GBP/USD is the December 17 low of 1.2665. If this level is broken, it could lead to a test of 1.2605, the December 13 low. After that, the November 22 cycle low of 1.2486 might be in focus.
Resistance Levels
If the GBP/USD manages to rise above 1.2700, buyers would need to move above the 1.2814/16 area, where the 50 and 200-day SMAs converge. Once this is achieved, they could then aim to challenge the 100-day SMA at around 1.2893.
Related topics：
