**GBP/USD Price Forecast: Sellers Dominate, But A Doji Could Signal Pause**
*By Christopher Lewis | Source: ForexFactory.com*
The GBP/USD currency pair has recently experienced significant selling pressure, with prices declining to key support levels. Yet, recent candlestick formations raise questions about whether this bearish momentum will persist or if a near-term pause is on the horizon. In this detailed outlook, we analyze the current technical picture, the fundamental drivers impacting the British pound and the US dollar, and what traders should watch for in the coming sessions.
### GBP/USD Overview: Current Market Position
The British pound has struggled against the US dollar in recent weeks. The price action has been marked by persistent lower highs and lower lows, underscoring the dominance of sellers. However, a notable doji candlestick has emerged on the daily chart, prompting speculation about a possible stall in the slump, or even a reversal, should conditions warrant.
#### Key Observations:
– Sharp decline in GBP/USD from recent highs
– Daily chart forms a doji — potential sign of indecision
– Selling pressure persists but is approaching a critical support zone
### Technical Analysis: Chart Patterns and Support Levels
#### Downward Momentum and Trend Analysis
GBP/USD has been entrenched in a downtrend for much of June 2024. The steep selling reflects market concerns over UK economic prospects, hawkish US Federal Reserve policy, and persistent inflationary worries.
– The pair broke several key support levels en route to its current price range
– Sloping moving averages validate the downtrend, with both short-term and long-term indicators pointing lower
– Sellers remain firmly in control, using rallies as opportunities to add to short positions
#### Doji Candlestick on the Daily Chart
A doji is a classic candlestick pattern that signals market indecision. It forms when the open and close prices are nearly equal, suggesting that neither buyers nor sellers could dominate during the session.
– The appearance of a doji after a sharp selloff can indicate exhaustion among sellers
– Typically, a doji alone is not a reversal itself but can act as a warning of a possible pause or change in direction
– The context within which the doji forms — after strong selling — adds to its relevance in this scenario
#### Critical Support and Resistance Levels
With GBP/USD now hovering near crucial support, traders are closely watching whether this zone will hold or give way to further losses.
Key technical levels to monitor:
– **Immediate support:** 1.2620–1.2650 area
– **Deeper support:** 1.2580
– **Initial resistance:** 1.2700, followed by the 1.2775 area
– **Further resistance:** 1.2820, then 1.2900 if bulls regain control
If the pair pushes beneath 1.2620, it opens the door to a more pronounced decline, potentially targeting the next support layers such as 1.2580. On the upside, a reversal and break above 1.2700 could see GBP/USD test the previous consolidation range near 1.2775.
#### Moving Averages and Oscillators
– The 50-period and 200-period moving averages are sloping downward, confirming the bearish trend
– Relative Strength Index (RSI) is approaching oversold territory but is not yet flashing extreme conditions, leaving room for further downside
– MACD also signals bearish momentum, although the pace of decline has slowed, in line with the latest doji formation
### Fundamental Factors Shaping GBP/USD
#### US Dollar Strength
The US dollar remains well supported on the back of the Federal Reserve’s hawkish tone and resilient economic readings. Fed officials have reiterated the need to keep rates elevated until inflation convincingly subsides, continuously providing a tailwind to the greenback.
Key dollar-positive drivers:
– Strong Nonfarm Payroll numbers and robust labor market data
– Sticky inflation readings above
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