**GBP/USD Forex Signal 22/10: Sterling Pressured – Chart Analysis & Outlook**
*Based on the article by Yohay Elam, as featured on MENAFN*
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## Overview
The GBP/USD pair, commonly known as “Cable,” has faced renewed selling pressure amid persistent dollar strength and ongoing Brexit-related anxieties. As of October 22, the sterling remains in a vulnerable position, flirting with key technical and psychological support levels while bulls struggle to mount a sustainable comeback. The following in-depth analysis explores the fundamental and technical landscape shaping GBP/USD price action, with a focus on actionable trading levels, macroeconomic catalysts, and risk factors to consider for the day ahead.
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## Fundamental Backdrop
### US Dollar Strength
The greenback has caught a steady bid in recent trading sessions, driven by the following factors:
– **Resilient US Economic Data:**
Recent readings point to a rebound in key metrics such as retail sales, industrial production, and housing starts. These numbers reinforce the US economy’s comparative outperformance amid the global recovery from the pandemic shock.
– **Federal Reserve Policy Clarity:**
The Federal Reserve has maintained its commitment to a gradual normalization of monetary policy. Clear communication regarding tapering asset purchases and the timing of potential rate hikes has underpinned the dollar.
– **Safe-Haven Flows:**
Renewed concerns over global economic momentum, supply chain disruptions, and pockets of risk aversion have fueled safe-haven flows into the US dollar.
### UK Sterling-Specific Factors
The British Pound faces several major hurdles:
– **Brexit Headwinds:**
Despite the formal exit from the European Union, lingering uncertainties over the implementation of trade agreements, complications in the Northern Ireland Protocol, and threats of legal disputes continue to pressure sterling.
– **Growth Concerns:**
The UK economy is showing signs of slowing momentum. Recent GDP figures have been underwhelming relative to expectations, while labor market data have raised questions about the sustainability of the post-lockdown recovery.
– **Bank of England Policy Dilemmas:**
While speculation mounts about a potential rate hike by the Bank of England (BoE), policymakers remain divided. Tighter policy to contain inflation must be balanced against risks to growth and employment. This indecision adds to volatility and undermines the pound.
– **Political Landscape:**
Ongoing political wrangling, especially over pandemic response measures and fiscal policy, add an additional layer of uncertainty for sterling traders.
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## Technical Analysis
### Daily Chart Signals
The prevailing technical narrative on the GBP/USD daily chart is one of bearish pressure and vulnerability to further losses.
#### Key Observations
– **Sustained Downtrend:**
The pair continues to trade below its 50-day and 200-day simple moving averages (SMAs), confirming bearish momentum.
– **Consistent Lower Highs and Lows:**
Price action is registering a series of lower peaks and troughs, indicative of a prevailing seller’s market.
– **Critical Support Zone:**
The 1.2900 to 1.2950 area acts as a crucial floor. A clean break and daily close beneath this zone may trigger accelerated downside and attract momentum-driven traders.
– **Resistance Areas:**
Immediate resistance is found at 1.3060 and stronger resistance at 1.3120. These levels cap rebound attempts and constitute zones to watch for potential failed rallies.
#### Price Action Levels
– **Immediate Support:**
– 1.2900
– Followed by 1.2850
– **Immediate Resistance:**
– 1.3060
– 1.3120
#### Chart Patterns and Oscillators
– **Relative Strength Index (RSI):**
The RSI indicator remains below the 50 midline, reflecting bearish momentum but not yet signaling oversold conditions.
– **Moving Average Confluence:**
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