- GBP/USD retreats to 1.2620 in the early hours of the European session on Friday.
- The pair's bearish outlook remains intact below the key EMA; the RSI indicator supports the bearish momentum.
- The first bullish barrier is seen in the 1.2645-1.2650 zone. On the other hand, the 1.2600-1.2605 zone acts as an initial support level.
The GBP/USD pair is trading lower around 1.2620 during the early hours of the European session on Friday. The fall in the British Pound (GBP) is supported by growing speculation that the Bank of England (BoE) will begin the rate cut cycle this year. Markets are pricing in the first rate cut in August, with a total of nearly three quarter-point interest rate cuts this year.
From a technical point of view, GBP/USD maintains the bearish trend, as the pair is below the 50 and 100 EMA on the 4-hour chart. Furthermore, the Relative Strength Index (RSI) is below the midline of 50, suggesting that the pair's bearish momentum and continuation of the decline look favorable.
The immediate resistance level for GBP/USD is seen in the 1.2645-1.2650 region, which represents the confluence of the upper boundary of the Bollinger Bands and the 50-period EMA. Any buying above that level will expose the 100 EMA at 1.2677. The additional bullish filter to watch is the March 18 high at 1.2746, on the way to the round level of 1.2800.
On the downside, the lower boundary of the Bollinger Bands in the 1.2600-1.2605 zone acts as an initial support level for the pair. A decisive break below this level would pave the way towards the March 22 low at 1.2575. The next bearish target is at the February 14 low at 1.2535 and finally at the round level of 1.2500.
GBP/USD 4-hour chart
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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.
