GBP/USD Price Analysis: Remains on the defensive below the 1.2250 mark amid the oversold condition

The GBP/USD pair remains on the defensive below the mid-1.2200s during the Asian session on Monday. Market players await the release of the UK’s Gross Domestic Product (GDP) for the second quarter and the US highly-anticipated Core Personal Consumption Expenditure (PCE) Price Index data due on Friday. The major pair currently trades near 1.2242, gaining 0.02% on the day.

That said, the hawkish stance from the Federal Reserve (Fed) officials lifted the US Dollar (USD) against the British Pound (GBP). Fed Banks of Boston and San Francisco Presidents, Susan Collins and Mary Daly, emphasized that although inflation is cooling down, additional rate hikes would be necessary. This, in turn, might act as a headwind for the GBP/USD pair

According to the four-hour chart, GBP/USD holds below the 50- and 100-hour Exponential Moving Averages (EMAs) with a downward slope, which means further downside looks favorable. The Relative Strength Index (RSI) holds in bearish territory below 50. However, the oversold condition indicates that further consolidation cannot be ruled out before positioning for any near-term GBP/USD depreciation.

That said, the immediate resistance level for GBP/USD will emerge near the middle line of the Bollinger Band at 1.2290. The additional upside filter is located at 1.2354, representing the 50-hour EMA. The upper boundary of the Bollinger Band at 1.2383 will be the next barrier for the pair, en route to 1.2432 (the 100-hour EMA).

On the flip side, the lower limit of the Bollinger Band at 1.2200 will be the critical support level. Further south, the next stop of GBP/USD is located at 1.2178 (a low of March 28). Any intraday pullback below the latter would expose the next downside stop at 1.2128 (a high of March 16) and finally at 1.2100 (a low of March 17).

GBP/USD four-hour chart