GBP/USD Price Analysis: Bears flirt with range support just below 1.2500

• GBP/USD is witnessing moderate moves in a range on the last trading day of the week.
• Oscillators on the daily/hourly charts support the prospects for a break below the trading range.
• A sustained move above the 1.2600 level is needed to negate the short-term bearish outlook.

The GBP/USD pair struggles to gain significant traction and oscillates between tepid gains and small losses at the start of the European session on Friday. At time of writing, the pair is trading just below the psychological level of 1.2500, almost unchanged on the day.

The US dollar continued to be supported by elevated US Treasury yields and proved to be a key factor acting as a headwind for the GBP/USD pair. Sterling was further hurt by political jitters in the UK, although signs of stability in equity markets capped the safe-haven dollar and helped limit the pair’s decline.

Generally speaking, the GBP/USD pair has oscillated in a known range for the last two weeks. The 1.2470-1.2460 area has provided some support for the pair and should now act as a turning point. Meanwhile, technical indicators on the daily/hourly charts remain in negative territory and support the prospects for an eventual breakout.

However, it would be wise to wait for sustained weakness below trading range support before taking a significant downside position. The next relevant support is near the weekly low, around the 1.2430 region touched on Tuesday, below which the GBP/USD could become vulnerable to accelerate the drop below the 1.2400 round level.

Some follow-on selling would expose the 1.2335-1.2330 support zone, closely followed by the 1.2300 level. If this latest level is not defended, the GBP/USD pair would be vulnerable to extend the bearish trajectory towards the intermediate support of 1.2245 and slide to retest levels below 1.2200 in the short term.

On the other hand, immediate resistance lies at the 1.2530 area. Any subsequent move to the upside could continue to face stiff resistance and remain capped near the 1.2600 round level. That said, sustained strength above that region could trigger a short-covering move and lift GBP/USD back towards May’s monthly high around the 1.2660-1.2665 area.

GBP/USD 4 hour chart

GBP/USD additional levels