FX.co ★ GBP/USD

The Cable has shown signs of recovery against the dollar, but its ability to maintain gains above the critical 1.2750 level remains in question. Despite a positive retail sales report and some supportive data, the pair has been unable to establish a firm upward trend. At the time of writing, the exchange rate stands at 1.2684, reflecting little change from earlier levels. US Economic Data Strengthens the Greenback: A solid US Retail Sales report, along with a decline in unemployment claims, supported the Greenback. These developments, coupled with growing speculation about a gradual rate cut by the Federal Reserve, have strengthened the USD. Moreover, the political landscape is also playing a role in driving the US Dollar higher, with increasing expectations that former President Donald Trump could win the 2024 presidential election. Traders believe that a Trump 2.0 administration could bring tax cuts. Technical Analysis of the GBP/USD: The pair has found strong support near the psychological level of 1.2630. Traders have also been closely monitoring the 100-day Exponential Moving Average (EMA), which currently stands at around 1.2670. This EMA has acted as a significant resistance point in recent sessions, and its ability to hold could be critical in determining whether the Pound can sustain its recovery or face a renewed decline. A failure to break above this level may signal further bearish pressure on the GBP.

The RSI, a key indicator of overbought or oversold conditions, currently shows bearish signals for the GBP/USD pair. When the RSI is below 50, it often indicates that the market is in a downward trend or at risk of further declines. In the case of GBP/USD, the RSI suggests that the currency pair may be poised for a deeper pullback if it continues to trade below 1.2700. This could lead to a test of lower support levels shortly.