GBP/USD Price Analysis: Cable bears need validation from 1.2500 and UK GDP to keep the reins
- GBP/USD licks its wounds after posting the biggest daily loss in seven weeks.
- Downside break of two-month-old ascending trend line, bearish MACD signals favor Cable bears.
- Nearly oversold RSI (14), upward-sloping trend line from late March challenges the Pound Sterling sellers.
- First readings of the United Kingdom (UK) Gross Domestic Product (GDP) for the first quarter (Q1) of 2023 eyed as well.
GBP/USD seesaws around 1.2515 during early Friday morning in Asia, after posting the biggest daily fall since March 07.
In doing so, the Cable pair justifies the downside break of a two-month-old ascending trend line, as well as bearish MACD signals. However, an upward-sloping trend line from late March, around 1.2500 round figure by the press time, joins the oversold RSI (14) line suggesting a corrective bounce in the GBP/USD price.
In a case where the GBP/USD remains weaker past 1.2500, the 200-bar SMA level of around 1.2470 will act as the last defense of the Cable pair buyers.
Meanwhile, the Pound Sterling’s corrective bounce needs to stay beyond the multi-day-old previous support line, close to 1.2540 at the latest, to convince the GBP/USD buyers.
Following that, a fortnight-old horizontal hurdle near 1.2580 and the recently flashed multi-month high of near 1.2680 could lure the Cable buyers.
Apart from the technical details, the first readings of the UK’s Q1 GDP, expected to print stagnant growth of 0.1% on QoQ but ease to 0.2% YoY versus 0.6% prior, will be the key for the GBP/USD traders to watch for clear directions.
GBP/USD: Four-hour chart
Trend: Limited downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
