The GBP/USD pair is making gains below the 1.2700 barrier in the early European session on Thursday. Registering positive moves for the second consecutive day, the pair reflects traders’ reduced expectations of an early interest rate cut by the Bank of England (BoE). As of now, GBP/USD hovers around 1.2682, marking a marginal 0.01% decline on the day.
Technical Perspective: Bearish Momentum Persists
From a technical standpoint, the bearish outlook for the GBP/USD pair remains intact, with the pair positioned below the 50- and 100-hour Exponential Moving Averages (EMA) on the four-hour chart. A notable observation is the potential crossover of the 50-hour EMA below the 100-hour EMA, signaling a Bear Cross. Such a development would affirm the prevailing downside bias for GBP/USD.
Further supporting the downward momentum is the 14-day Relative Strength Index (RSI), residing in bearish territory below the 50 midline, aligning with the current selling pressure.
Key Levels to Watch: Immediate Resistance and Support
The confluence of the 100-hour EMA and the psychological level at 1.2700 serves as an initial resistance for the GBP/USD pair. A subsequent upside barrier lies in the 1.2760-1.2765 range, encompassing the January 15 high and the upper boundary of the Bollinger Band. Beyond this, additional resistance levels are seen near the January 12 high at 1.2785 and the high of December 28, 2023, at 1.2828.
Conversely, the first support level for GBP/USD rests near the December 18 low at 1.2628. A breach below this level would bring attention to the lower limit of the Bollinger Band at 1.2608, followed by a descent to the December 7 low at 1.2544 should selling pressure persist. Traders are advised to monitor these key levels for potential market shifts.