The GBP/USD exchange rate continues to struggle as the British Pound slips deeper below the 1.3000 level, pressured by a strong U.S. Dollar. The pair’s decline reflects the ongoing demand for safe-haven assets as investors turn risk-averse amid market uncertainty. On Friday, GBP/USD was trading around 1.2938, marking a 0.37% drop, as the Greenback regained its footing after Thursday’s dip.
Technical Overview: Pound Under Pressure
The GBP/USD has turned increasingly bearish after failing to maintain the key 1.3000 level, signaling a downward shift in market sentiment. Technical indicators, including the Relative Strength Index (RSI), suggest potential for further declines, with RSI moving into bearish territory.
- Key Support Levels: The first significant support lies at 1.2894, near the March 8 low. Should this level break, the next major support would be 1.2880, followed by the 200-day Simple Moving Average (SMA) at 1.2814. A sustained move below 1.2800 could deepen the bearish outlook.
- Resistance Points: Any potential rebound would face resistance near the 100-day SMA at 1.2990. Clearing this could allow the Pound to retest the psychologically important 1.3000 level. If GBP/USD manages to break above 1.3000, the next target would be 1.3105, a confluence of the October 15 high and the 50-day SMA.
Market Sentiment and Dollar Strength
The recent rise in the U.S. Dollar reflects a growing shift toward safe-haven assets, spurred by concerns over global economic conditions. With the Federal Reserve indicating a cautious stance on rate cuts, the Dollar has strengthened, putting further pressure on the Pound.
Investors’ preference for the Greenback is likely to persist in the near term, especially if U.S. economic data continues to outperform expectations. The preliminary Michigan Consumer Sentiment Survey, which rose to 73 in November, signals resilience in U.S. consumer confidence, reinforcing the Dollar’s safe-haven appeal.
Also read : Bank OfEngland Set To Cut Interest Rates By 25bps As UK Inflation Eases To 1.7%, Weighing On GBP/USD
Outlook for GBP/USD
Looking ahead, GBP/USD is positioned to stay under pressure as long as the U.S. Dollar remains strong and risk sentiment favors safer assets. Technical indicators suggest that if GBP/USD breaks below 1.2894, it may continue to decline towards the 1.2800 mark. Conversely, a rally past 1.3000 could shift sentiment, but buyers would need to clear 1.3105 for a stronger recovery to take shape.
