GBP/USD outlook: The cable dips further on renewed risk aversion

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable remains in red on Friday and extends lower after nearly 2% drop on Thursday, pressured by renewed risk aversion after major central banks showed unexpectedly hawkish stance and prompted investors into safety of dollar.

Weaker than expected UK retail sales in November added to weakened sentiment, which offset potential positive impact upbeat UK services PMI.

Technical studies on daily chart weakened, although indicators are still positively aligned, but formation of reversal pattern and overbought studies on weekly chart warn of deeper pullback.

Fresh bears cracked initial Fibo support at 1.2219 (23.6% of 1.1146/1.2446 upleg) and pressure pivotal 200 DMA (1.2098), where headwinds could be expected.

Break here would risk extension towards key supports at 1.2000/1.1950 (psychological / Fibo 38.2%) break of which would sideline larger bulls and open way for deeper correction of an uptrend from Sep 26 multi-decade low (1.0342).

Broken daily Tenkan-sen (1.2276) reverted to solid resistance which should cap and keep fresh bears in play.

Res: 1.2239; 1.2276; 1.2446; 1.2520.
Sup: 1.2098; 1.2000; 1.1950; 1.1900.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2634
2. R2 1.2534
3. R1 1.2356
PP 1.2256
1. S1 1.2078
2. S2 1.1978
3. S3 1.18

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

AUD/USD remains depressed near 0.6950 after RBA minutes

AUD/USD attracts follow-through selling during Tuesday’s Asian session, looking to extend the overnight rejection slide from 0.7000, or a two-week top, following the release of RBA meeting Minutes. The US Dollar retains a bullish undertone near its highest level since April 2025 as energy-driven inflation risks keep December Fed rate hike bets firmly on the table. Adding to this, geopolitical risks further underpin the safe-haven USD.

USD/JPY extends retreat below 158.50 as intervention risks loom

USD/JPY is dropping below 158.50 in the Asian session on Tuesday, snapping a two-day winning streak and pulling back from an over two-week top touched the previous day, despite Japan's soft PPI inflation print. Bulls turn cautious amid speculation that authorities will step in to prop up the Japanese Yen, which, in turn, weighs on the pair.

Gold bulls seem hesitant below $4,200 as hawkish Fed offset USD weakness

Gold retains a mildly positive bias though it remains capped below the $4,200 mark and the top boundary of a two-week-old trading range. The US Dollar retreats from its highest level since April 2025 amid some profit-taking, offering support to the precious metal. However, the US Federal Reserve's hawkish stance and escalating Middle East conflicts could limit deeper losses for the safe-haven buck, keeping a lid on the commodity and warranting some caution for aggressive bulls.

Solana reclaims 50-day EMA amid tokenization expansion

Solana (SOL) trades above $107 on Tuesday, reclaiming the 50-day EMA after closing below it the previous day. Meanwhile, Solana’s tokenization expansion and the upcoming listing of Hong Kong’s second spot Solana Exchange Traded Fund highlight growing institutional interest.

Dollar corrects as markets watch bank earnings

The US Dollar remains broadly strong but is now correcting, with a possible retest of the breakout zone around 102 on the Dollar Index. Equity markets are showing a mixed picture: the S&P 500 and Nasdaq are weaker, while blue-chip indices such as the Dow Jones and DAX are moving higher.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?