GBP/USD Price Analysis: Cable buyers run out of steam below 1.2600, UK employment, US inflation eyed
- GBP/USD retreat from the highest level in a month, snaps three-day uptrend.
- UK’s economic fears join US Dollar consolidation to push back Cable buyers.
- Six-week-old horizontal resistance challenges Pound Sterling bulls amid overbought RSI.
- Sellers need validation from 200-SMA to retake control.
GBP/USD holds lower ground near the intraday bottom as it prints the first daily loss in four amid early Monday in Europe, mildly offered near 1.2570 at the latest. That said, the Cable pair rose in the last two consecutive weeks amid a broad US Dollar fall but concerns about the UK’s economic health and the market’s positioning for this week’s key data/events weigh on the Pound Sterling pair of late.
Also read: GBP/USD holds steady near multi-week top as traders await this week's key data/event risks
Technically, a horizontal area comprising multiple levels marked since late April, around 1.2580-85, joins the overbought RSI (14) line to favor the latest weakness in the Cable pair. Adding strength to the downside bias is the looming bear cross on the MACD indicator.
With this, the quote is likely to extend the latest fall towards a one-month-long horizontal support zone of around 1.2540-35. Though, the 200-SMA level surrounding 1.2480 could challenge the GBP/USD bears afterward.
In a case where the Pound Sterling pair remains weak past 1.2535, the odds of witnessing a slump toward the previous monthly low of around 1.2310 can’t be ruled out.
Meanwhile, a successful upside break of the aforementioned horizontal resistance area near 1.2580-85 needs validation from the 1.2600 round figure to convince GBP/USD bulls.
Following that, a run-up to cross the previous monthly high of 1.2680 can be expected without hesitation.
GBP/USD: Four-hour chart
Trend: Pullback 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.
