GBP/USD Price Forecast: Hovers around 1.3400 with bearish pressure intact
GBP/USD edges higher after three days of losses, trading around 1.3400 during the Asian hours on Tuesday. The technical analysis of the daily chart indicates an ongoing bearish bias, as the pair trades within a descending channel pattern. The 14-day Relative Strength Index (RSI), a momentum indicator, has slipped toward 39, showing fading bullish momentum after the earlier overbought reading and reinforcing the idea of corrective pressure within a broader range rather than a clear trend reversal.
The near-term bias is neutral with a slight bearish tilt as spot holds just above the 50-day Exponential Moving Average (EMA) while trading below the falling nine-day average, which caps recovery attempts. The immediate support lies at the reversal zone around 1.3350. The proximity to the 50-day EMA may attract dip buyers toward the descending channel around 1.3170, followed by the 10-month low at 1.3010. Read more…
GBP/USD bounces off eleven-week lows as 1.34 holds on Iran sell-off
GBP/USD fell around one-half of one percent on Monday, briefly sliding to an eleven-week low around 1.3310 in early trade before staging a mid-session recovery to settle close to the 1.3400 handle. The drop was driven almost entirely by broad US Dollar strength as the Iran conflict triggered a rush into safe-haven assets, though Sterling’s recovery from the lows left a long lower wick on the daily candle, suggesting buyers stepped in near the 200-day Exponential Moving Average (EMA). Over the past week, Sterling was one of the weaker G10 currencies, losing ground to the US Dollar, Australian Dollar, Canadian Dollar, and New Zealand Dollar, while holding roughly flat against the Swiss Franc and gaining only against the Euro and Japanese Yen.
The Bank of England (BoE) held rates at 3.75% in February by a narrow 5-4 vote, with Governor Andrew Bailey casting the deciding vote to hold. Testifying before Parliament’s Treasury Committee last week, Bailey described the March 19 decision as “a genuinely open question,” noting that services price inflation came in at 4.4% in January, well above the BoE’s 4.1% forecast. Chief Economist Huw Pill echoed the caution, warning against being “beguiled” by headline inflation falling toward the 2% target. UK labour market data have softened, with unemployment rising to 5.2% and wage growth moderating to 4.2%, which is keeping markets leaning toward a March cut despite the mixed signals from policymakers. Read more…
GBP/USD slides towards 1.3400 as Mideast war boosts US Dollar
GBP/USD retreats some 0.49% on Monday amid risk aversion sponsored by the conflict in the Middle East between the alliance of the US and Israel against Iran. Consequently, safe-haven peers like the US Dollar (USD) remain bid in the day, hence weighing on the pair. At the time of writing, the major trades at around 1.3400. Over the weekend, the US and Israel eliminated Iran’s supreme leader, Ayatollah Ali Khamenei, increasing tensions in the Middle East. Iran retaliated and attacked a British air base in Cyprus, causing limited damage.
Consequently, geopolitical risks pushed the Greenback higher. The US Dollar Index (DXY), which measures the buck’s performance against a basket of six currencies, gains 0.76% up at 98.39, a headwind for the British Pound (GBP). Recently, S&P Global revealed that the February Manufacturing PMI in the US rose by 51.6, exceeding estimates and the previous print of 51.2. Traders are eyeing the release of the ISM Manufacturing PMI for the same period, expected to deteriorate from 52.6 to 51.8. Read more…
