*Credit: Original Analysis by Adam Button, as published on InvestingLive.com*
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# Technical Analysis: GBP/USD Pushing Lower, Aiming for November Lows
The British Pound’s performance against the US Dollar (GBP/USD) has entered a critical phase, with the pair consistently edging lower in recent sessions. Heightened anticipation over monetary policy moves and shifts in global risk sentiment have navigated the GBP/USD downward, raising prospects of revisiting key support levels observed in November. This comprehensive technical analysis, based on Adam Button’s original insights for InvestingLive.com, examines the currency pair’s latest price action, influential technical indicators, and potential future scenarios.
## Overview: Pound Under Persistent Pressure
Throughout recent weeks, GBP/USD has experienced a series of declines following a failed attempt to break above prominent resistance zones. The slide comes in the wake of resilient US economic data and persistent hawkish undertones from Federal Reserve communications, which have buoyed the US Dollar broadly. Conversely, the Bank of England remains hamstrung by lackluster UK growth prospects, and softening inflation prints have led to speculation that policy tightening is conclusively over.
The interplay of these macroeconomic drivers has set a bearish tone in the GBP/USD. As the pair moves toward historically significant levels, market participants are closely analyzing both fundamental and technical signals to project potential breakout or breakdown scenarios.
## Short-Term GBP/USD Price Action
### Pullback Toward November Lows
The technical landscape for GBP/USD is defined by renewed selling pressure below 1.26, with the pair threatening to retest the pivotal November low near the 1.2300 mark. This dynamic reflects both Dollar strength and a lack of immediate bullish catalysts for the Pound. Price action has unfolded within a well-defined channel, characterized by lower highs and lower lows, underscoring a medium-term downtrend.
In summary:
– Recent rallies have faltered quickly, with sellers emerging ahead of the 1.26-1.2650 resistance area.
– Dips have found only modest support around minor previous lows, but the pair remains vulnerable to further downside.
– Volume analysis shows increased activity on bearish breakdown attempts, hinting at firm institutional participation in the move lower.
### Contextual Drivers
Several key themes are contributing to the latest leg down in GBP/USD:
– **US Rate Expectations:** Fed officials hint at fewer rate cuts than previously priced in, improving Dollar appeal.
– **UK Macroeconomics:** Growth remains tepid in the UK, and mixed inflation data has eroded arguments for any imminent rate hikes.
– **Risk Sentiment:** Fluctuating global risk appetite has tended to support the US Dollar during risk-off moves, compounding GBP/USD’s weakness.
## Technical Landscape: Levels to Watch
### Support and Resistance
A study of the daily and four-hour charts reveals clear technical markers:
**Major Resistance:**
– 1.2650: Upper end of recent consolidation, multiple rejection wicks visible on previous tests.
– 1.2500: A psychologically significant level, now acting as interim resistance after yields turned.
– 1.2450: Minor swings highs from the prior price cycle.
**Critical Support:**
– 1.2370: Interim level where buyers have occasionally stepped in, may delay immediate breakdown.
– 1.2300: The primary focus for bears, coinciding with November 2023’s swing low and a key inflection point for longer-term trend sustainability.
A close below 1.2300 would represent a notable technical breakdown, opening the path to deeper retracements on the weekly and monthly charts.
### Trend Indicators and Oscillators
– The 50-day and 200-day moving averages are flattening out, reflecting consolidation but with an emergent bearish bias as the pair trades below both marks.
– Daily RSI readings are trending toward oversold territory, but not yet flashing a full-fledged reversal signal. This suggests further downside momentum may be possible before a
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