GBP/USD Slips Back Below 200-DMA, Downtrend Looms
The Pound Sterling (GBP) reversed course against the US Dollar (USD) on Monday, falling below the key 200-day moving average (DMA) after initially surpassing it. This decline came as US data, specifically the Employment Cost Index (ECI), hinted at potential rising inflation, boosting the Greenback.
GBP/USD Currently Trades at 1.2517
The GBP/USD pair currently trades at 1.2517, down 0.36% from its daily high of 1.2563.
Technical Outlook: Downtrend at Risk of Resuming
The GBP/USD holds a neutral technical bias. However, the inability to hold above the 200-DMA at 1.2564 could trigger a pullback. Traders anticipate a test of the November 14, 2023, high at 1.2506. A break below this level could lead to further declines towards the April 26 intermediate support at 1.2448, and eventually the year-to-date (YTD) low of 1.2299.
Potential Upside Limited
Conversely, a surge above the 200-DMA could pave the way for a test of 1.2600. Beyond that, key resistance levels include the 50-DMA at 1.2619 and the 100-DMA at 1.2645. Further gains above these levels could potentially extend a rally towards 1.2700.