- GBP/USD falls sharply, influenced by a move towards safer assets and a strengthening US Dollar.
- Technical analysis indicates a shift to bearish territory after dropping below the 200-day moving average.
- Recovery targets include reclaiming 1.2500, with resistance at the 200-day DMA.
The British Pound plunged against the US Dollar late in the North American session, down 0.74%, and trades at 1.2445 after hitting a daily high of 1.2559. Risk aversion triggered a flight to safety, a headwind for the Pound Sterling even though UK GDP figures were solid.
GBP/USD Price Analysis: Technical outlook
From a technical perspective, the GBP/USD shifted bearish as it achieved a successive series of lower highs and lows while breaching key support levels. On its way south, the pair cleared the 200-day moving average (DMA) at 1.2584, which opened the door to a tumble below 1.2500.
For a bearish continuation, the GBP/USD needs to clear the 1.2400 mark. A breach of the latter will expose the November 17, 2023, low of 1.2374, followed by the 1.2300 mark.
On the other hand, if buyers lift the GBP/USD past the 1.2500, that could pave the way for further gains. The next resistance would be the 200-day moving average (DMA) at 1.2584, ahead of 1.2600.
As the GBP/USD dropped below key support levels and achieved
GBP/USD Price Action – Daily Chart
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