The GBP/USD pair plunged below 1.2200 during the North American session following the release of the US Producer Price Index (PPI) data. The report indicated that prices dropped slightly but remained in line with Wall Street’s expectations, putting downward pressure on the Pound Sterling (GBP). At the time of writing, the pair is trading at 1.2166, showing a decline of over 0.26%.
Technical Outlook:
The downtrend in GBP/USD remains intact, despite a brief intraday rise to 1.2249. Sellers took advantage of this uptick, driving the pair below the 1.2200 mark and extending the losses. As of now, the pair is hovering around the 1.2160 level.
Support Levels:
1.2150: A crucial support level. If GBP/USD falls below this, the next support comes from the 1.2136 low of the day.
1.2100: If the pair continues to weaken, this level would act as the next floor. Following that, the year-to-date (YTD) low of 1.2099 could come into play.
Resistance Levels:
1.2200: For a bullish resumption, GBP/USD needs to reclaim this level. A move above here would open the way for a test of the 1.2249 intraday high.
1.2299: If the pair manages to break above 1.2249, it could target the April 2024 swing low at 1.2299, followed by the psychological resistance at 1.2300.
1.2351: A further rally above 1.2300 could bring the January 2 daily low of 1.2351 into focus.
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