The GBP/USD pair has retraced its recent losses, trading around 1.2840 during the Asian session on Wednesday. Analysis of the daily chart suggests that the pair is currently within the narrow section of a descending channel, indicating either a consolidation phase or a potential reversal.
The Moving Average Convergence Divergence (MACD), a key momentum indicator, signals weakening bullish momentum as the MACD line remains below the signal line but above the centreline. Additionally, the 14-day Relative Strength Index (RSI) is slightly below the 50 mark, pointing to a bearish bias.
In terms of resistance, the immediate obstacle is at the 1.2850 level, followed by the nine-day Exponential Moving Average (EMA) at 1.2869. A breakout above this could propel GBP/USD towards the yearly high of 1.3044, achieved on July 17.
Conversely, immediate support lies around the lower boundary of the descending channel at 1.2525. A breach of this level might increase downward pressure, pushing the pair towards the throwback support level at 1.2615.
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