GBP/USD: Bearish Momentum Deepens as Pound Pressures Key Support

GBP/USD closed at 1.2882, after an intraday high of 1.2925 and a low of 1.2865. The pair continues to drift lower, extending its decline from recent highs as bearish momentum gains traction. The technical structure shows a breakdown from consolidation, with downside risk building toward key psychological and structural support levels.

Key Technical Observations

Moving Averages Align Bearishly: The 15-day moving average (1.2674) remains below the 20-day moving average (1.2616), and both are trending downward — a clear indication of persistent bearish momentum. The price is now firmly below both averages, confirming short-term control by sellers.

Trend Structure: After multiple failed attempts to sustain rallies above 1.3600, the pair has carved a lower-high, lower-low structure. The current move below 1.2900 breaks a key horizontal base that had supported price for several sessions, suggesting a potential continuation toward 1.2800–1.2750 in the coming days.

RSI Momentum: The RSI at 35.78 is trending lower and approaching oversold territory but has not yet reached extreme levels. This indicates that bearish pressure remains in play, although short-term rebounds may occur as traders take profits.

Price Behaviour: Candle formations show consistent selling pressure with limited upper wicks, reflecting a lack of meaningful bullish follow-through. A daily close below 1.2850 would validate a breakdown and signal further downside extension.

Macro & Market Context

Dollar Strength Dominates: The US dollar remains firm across the board, buoyed by resilient economic data and a “higher-for-longer” Federal Reserve stance. Yield differentials continue to favour the dollar over the pound.

BoE Policy Outlook: The Bank of England has turned increasingly cautious as UK inflation moderates, fuelling speculation of rate cuts later in the year. This dovish shift contrasts sharply with the Fed’s tone, keeping GBP under pressure.

Risk Sentiment: Broad market risk aversion and tightening financial conditions are amplifying demand for the dollar, leaving GBP vulnerable to further downside moves in risk-off sessions.

Key Levels to Watch

• Immediate Resistance: 1.2950 – near-term pivot; minor recovery barrier.
• Next Resistance: 1.3050 – key short-term cap.
• Immediate Support: 1.2850 – current breakdown area; short-term target.
• Deeper Support: 1.2750 – next structural base; potential oversold bounce zone.

Bias: Bearish

The technical bias remains bearish below 1.2950, with potential to extend losses toward 1.2800–1.2750. Any intraday recovery is likely to face resistance near 1.2950–1.3000.

Key Takeaways

• Momentum favours selling rallies toward 1.2950, targeting 1.2800–1.2750, with stops above 1.3050.
• RSI suggests limited downside before potential consolidation, but trend continuation remains the dominant scenario.
• Keep an eye on DXY and U.S. yields — continued strength there could accelerate GBP downside.