GBP/USD Price Analysis: The next upside barrier is seen at 1.2580

The GBP/USD pair snaps the three-day winning streak during the early European session on Wednesday. The downtick of the major pair is backed by renewed US dollar demand. At the press time, GBP/USD is losing 0.09% on the day to trade at 1.2525.

On Monday, the Bank of England (BoE) Governor Andrew Bailey said that it was too early to think about rate cuts and borrowing costs might have to rise again if inflation proved to be more persistent than estimated. Bailey further stated that the conflict in the Gaza Strip has increased the likelihood that inflation will rise again.

From the technical perspective, GBP/USD holds above the 50- and 100-hour Exponential Moving Averages (EMAs) with an upward slope on the four-hour chart, suggesting the path of least resistance is to the upside. Furthermore, the Relative Strength Index (RSI) holds in the bullish territory above 50, indicating the further upside looks favorable.

The upper boundary of the Bollinger Band at 1.2580 acts as an immediate resistance level for the major pair. The next upside barrier is seen near a high of September 4 at 1.2642. The additional upside filter to watch is a high of September 1 at 1.2713, en route to a high of August 30 at 1.2746.

On the downside, the initial support level for GBP/USD is located near a high of November 16 at 1.2456. Further south, the next downside target is seen at the 50-hour EMA. The key contention level will emerge at 1.2400, portraying the confluence of the lower limit of the Bollinger Band and a psychological round mark. A breach of the level will see a drop to the 100-hour EMA at 1.2357.

GBP/USD four-hour chart