The GBP/USD pair is attracting fresh selling interest after a volatile trading session, sliding closer to the mid-1.2900 range during Tuesday’s Asian session. Despite this decline, spot prices remain above last week’s lowest level since August 16, but they are increasingly influenced by movements in the US Dollar (USD).
The US Dollar has regained strength, supported by expectations of a less aggressive policy easing from the Federal Reserve (Fed), which is dragging the GBP/USD pair lower. Additionally, rising expectations for further interest rate cuts by the Bank of England (BoE) in November and December indicate that the path of least resistance for the pair is likely to be downward.
From a technical standpoint, repeated failures to breach the psychological level of 1.3000 and a recent breakdown below the 100-day Simple Moving Average (SMA) confirm a negative near-term outlook. Oscillators on the daily chart are firmly in negative territory and have yet to approach oversold levels, suggesting that a further slide toward the 1.2900 mark, or the monthly swing low, is a strong possibility.
Continued selling pressure could serve as a fresh catalyst for bearish traders, extending the downtrend that began from the 1.3435 region—the highest level reached since February 2022 last month. In this scenario, the GBP/USD pair may target the crucial 200-day SMA, currently situated near the 1.2800 round figure, with some intermediate support around the 1.2860 region.
Conversely, the 1.3000 level has emerged as a significant barrier. If spot prices can breach this level, they may rise toward the 1.3050 supply zone. Sustained strength beyond this point could trigger a short-covering rally, lifting the GBP/USD pair beyond the 1.3100 mark, toward the resistance zone of 1.3115-1.3120. Such follow-through buying would negate the current negative outlook and shift the bias in favor of bullish sentiment.
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