GBP/USD Forecast: Bears eye a break below 1.2350

GBP/USD has turned south, dropping below 1.2400 early Wednesday.
A four-hour close under 1.2350 could bring in additional sellers.
Risk mood is likely to continue to drive the pair's action in the near term.

Eren Sengezer FXStreet

GBP/USD has reversed its direction, declining below 1.2400 early Wednesday, after having managed to close in positive territory above this level on Tuesday. The technical outlook points to a bearish tilt in the short term and a break of the 1.2350 support could open the door for an extended slide.

The risk-positive market atmosphere made it difficult for the US Dollar (USD) to find demand in the first half of the day on Tuesday and helped GBP/USD stage a decisive rebound. In the late American session, however, markets turned cautious after the bill to suspend the debt ceiling only narrowly passed the House Rules Committee.

Early Wednesday, US stock index futures are down between 0.2% and 0.3%, suggesting that market participants are refraining from committing to a risk rally as the bill moves to a vote in the House. Several Republicans have spoken out against the debt-limit deal and investors are sceptical whether the bill could be approved quickly.

In case safe-haven flows dominate the financial markets in the second half of the day, GBP/USD is likely to have a difficult time retracing its daily decline. On the flip side, a positive shift in market mood could weigh on the USD and help the pair limit its losses.

GBP/USD technical analysis

The upper-limit of the broken descending channel aligns as key support level at 1.2350. If GBP/USD falls below that level and starts using it as resistance, it could face interim support at 1.2320 (Fibonacci 38.2% retracement level of the latest uptrend) before falling toward 1.2300 (psychological level, mid-point of the descending channel). In case 1.2300 fails, the next bearish target could be seen at 1.2260 (lower-limit of the descending channel).

The 1.2370 (20-period Simple Moving Average (SMA)) level aligns as immediate resistance before 1.2390/1.2400 (50-period SMA, psychological level). A four-hour close below the latter could attract buyers and pave the way for an extended upward correction toward 1.2450 (Fibonacci 23.6% retracement, 100-period SMA).

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD stays weak near 1.1650 ahead of critical US events

EUR/USD stays in the red near 1.1650 in the European trading hours on Friday. The pair remains undermined by broad US Dollar strength and a cautious market mood. Traders keenly await the US Nonfarm Payrolls data and Supreme Court's ruling on Trump's tariff powers for further direction.

GBP/USD holds lower ground below 1.3450, with eyes on US data

GBP/USD remains subdued for the fourth consecutive day, while trading below 1.3450 in the European session on Friday. Markets remain in a wait-and-see mode before the key US event risks and prefer to hold the US Dollar, which weighs negatively on the pair. The US monthly jobs data and the Supreme Court decision on tariffs are awaited.

Gold flat lines around $4,475; looks to US NFP report for fresh impetus

Gold reverses a modest intraday dip to the $4,453 area, and trades near the top end of its daily range heading into the European session. The upside, however, seems limited as traders might opt to wait for the US Nonfarm Payrolls report later today. The crucial employment details will be looked upon for more cues about the Federal Reserve's rate-cut path.

Nonfarm Payrolls expected to show US labor market remained weak in December

The United States Bureau of Labor Statistics will release the Nonfarm Payrolls data for December on Friday at 13:30 GMT. Economists expect Nonfarm Payrolls to rise by 60,000 in December following the 64,000 increase recorded in November.

2026 economic outlook: Clear skies but don’t unfasten your seatbelts yet

Most years fade into the background as soon as a new one starts. Not 2025: a year of epochal shifts, in which the macroeconomy was the dog that did not bark. What to expect in 2026? The shocks of 2025 will not be undone, but neither will they be repeated.

Pepe Price Forecast: PEPE risks 100-day EMA fallout as bullish interest fades

Pepe is under extreme selling pressure, trading in the red for the fifth consecutive day, down 1% at press time on Friday. Pepe’s decline following a 72% hike last week suggests a likely profit-booking phase, while on-chain data indicates declining network activity.