Daily Forex Analysis – GBP/USD
The GBP/USD pair continues its consolidation phase, having initiated this trend at 1.2040. The intraday bias remains impartial, suggesting an ongoing state of equilibrium in the market. A key factor to monitor is the resistance level at 1.2340. While this resistance remains unbroken, the market sentiment skews towards a bearish outlook.
Should we see a decisive downturn breach through the 1.2040 mark, it could signal the resumption of the broader decline that began at the high of 1.3145, potentially setting the stage for the pair to test the 1.1805 support level. Conversely, a breakthrough above 1.2340 could shift market sentiment to a bullish bias, aiming towards the 38.2% Fibonacci retracement of the decline from 1.3145 to 1.2040, positioned at 1.2462.
Expanding the view, the decline from the medium-term peak of 1.3145 might still represent a mere correction in the longer upward trend from the 2022 low of 1.0355. However, the possibility of a full-scale trend reversal seems to be gaining traction. A convincing break below the 38.2% Fibonacci retracement level of the ascent from 1.0355 to 1.3145, now at 1.2079, could open the path towards the 61.8% retracement at 1.1421. For the time being, downside risks are expected to persist as long as the 55-day EMA, currently at 1.2350, caps any upward rebounds.
Analysis Summary
The GBP/USD pair is in a state of flux, consolidating around 1.2040 with a neutral bias. Resistance at 1.2340 and support at 1.1805 are critical levels determining the pair’s short-term direction. The potential for a trend reversal from the 2022 low adds to market uncertainty.
Key Points
- Neutral bias with key resistance at 1.2340.
- Breach below 1.2040 may extend the decline.
- Reversal potential above 1.2340, targeting 1.2462.
