- Since last Thursday, the GBP/USD pair has lost more than 3% due to the strengthening of the US dollar.
- GBP/USD Price Analysis: A daily close below the 100 DMA would aggravate a test of 1.2000.
The pound sterling (GBP) capped its decline against the US dollar (USD) on Monday around the 100-day EMA at 1.2028, although GBP/USD remains below the latter. That being said, a daily close in GBP/USD would keep bears hoping to test 1.2000. At the time of writing, GBP/USD is hovering around 1.2024 after reaching a daily high of 1.2077.
GBP/USD Price Analysis: Technical Perspective
Since last Thursday, after the Bank of England (BoE) raised rates by 50 basis points, bringing the Bank Rate to 4%, GBP/USD has plunged 1.20%. This was then followed by last Friday’s US jobs data, which put downward pressure, sending GBP/USD into a tailspin, plunging over 150 points in the session towards the 1.2050 zone.
That being said, the technical outlook is leaning to the downside. Oscillators such as the Relative Strength Index (RSI) and the Rate of Change (RoC0) turned bearish. The latter shows that the sellers are building strong momentum, posing a threat to break through the psychological 1.2000 level.
If GBP/USD breaks below 1.20, it would open the door for further declines. Once broken, GBP/USD’s next support would be 1.1900, followed by a two-month uptrend line passing around 1.1880-1.1900 and then the low around 1.1841.
GBP/USD Key Technical Levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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