The GBP/USD pair posted modest gains, reaching near 1.2520 during the early European session on Friday. However, the upside potential for the pair appears limited due to thin trading conditions and growing expectations that the US Federal Reserve will implement fewer rate cuts in the upcoming year.
On the daily chart, the bearish outlook for GBP/USD remains intact, with the price hovering around the key 100-day Exponential Moving Average (EMA). The downward momentum is further supported by the 14-day Relative Strength Index (RSI), which is positioned below the neutral level at 38.35, signaling continued bearish pressure.
The first downside target for GBP/USD is 1.2460, the lower limit of the Bollinger Band. A break below this level could push the pair towards 1.2331, the low reached on April 23. Further declines may find support at 1.2187, the low of November 10.
On the flip side, immediate resistance is found at 1.2614, the high from December 20. A further rally could encounter resistance at 1.2728, the high from December 17, with the critical upside barrier located in the 1.2810-1.2820 range, where the 100-day EMA and the upper Bollinger Band converge.
Related Topics:
