GBP/USD Price Analysis: Refreshes daily low, eyes 1.3000 amid some USD dip-buying

The GBP/USD pair faded a mid-European session bullish spike to a one-week low and dropped to a fresh daily low, around the 1.3030-1.3025 region in the last hour.

The US dollar drew support from a fresh leg up in US Treasury bond yields, bolstered by hawkish Fed expectations, and has now recovered a major part of its early losses to the weekly low. This, in turn, was seen as a key factor behind the GBP/USD pair's sharp intraday slide of over 50 pips. From a technical perspective, the pair's inability to capitalize on the positive move and the emergence of fresh selling at higher levels suggests that the near-term downfall might still be far from over. Hence, any subsequent move up is likely to remain capped near the 1.3100 confluence hurdle. 

The said handle comprises 200-period SMA on the 4-hour chart and a descending trend line, which should act as a pivotal point and help determine the near-term trajectory. A convincing breakthrough would suggest that the GBP/USD pair has formed a base below the 1.3000 psychological mark. This, in turn, would pave the way for additional gains and push spot prices to the next relevant hurdle near the 1.3145-1.3150 area, above which bulls might aim to reclaim the 1.3200 round figure. The positive momentum could further get extended towards the 1.3260-1.3265 horizontal zone.

On the flip side, the 1.3000-1.2990 area might continue to protect the immediate downside. Sustained weakness below, leading to a subsequent break through the YTD low, near the 1.2975-1.2970 zone, would make the GBP/USD pair vulnerable to resume its previous well-established bearish trend. The downward trajectory could then drag spot prices to the 1.2910-1.2900 support zone en-route the mid-1.2800s support zone. The GBP/USD pair could eventually drop to test the 1.2820 intermediate support ahead of the 1.2800 round-figure mark.

GBP/USD 4-hour chart

Key levels to watch