The GBP/USD currency pair has retreated from its session highs, trading around 1.3260. This pullback follows a breakout from an ascending channel on the 60-minute chart, indicating a shift in momentum.
Technical Analysis: Short-Term Outlook
On the 60-minute chart, GBP/USD has broken downward from an ascending channel formation. The 14-hour Relative Strength Index (RSI) is approaching oversold conditions, suggesting potential for further downside.
Key Support Levels:
- 1.3206: A significant support level where the pair may find buying interest.
- 1.3157: A deeper support zone that could attract more buyers if the price declines further.
Resistance Levels:
- 1.3314: An immediate resistance level where selling pressure may emerge.
- 1.3362: A higher resistance point that could cap any upward movement in the near term.
Fundamental Overview
Recent economic data has influenced the GBP/USD movement. In the U.S., the April Consumer Price Index (CPI) showed a 0.2% monthly increase, slightly below expectations, with the year-over-year rate at 2.3%. In the UK, April’s claimant count change rose to 5.2K, surpassing forecasts, while the unemployment rate remained steady at 4.5%.
These mixed economic indicators have contributed to the current pullback in GBP/USD.
Outlook
If GBP/USD maintains its position above the 1.3206 support level, there may be potential for a rebound towards the resistance levels. Conversely, a break below 1.3206 could lead to further declines towards 1.3157. Market participants will closely monitor upcoming economic data, particularly U.S. inflation figures, for cues on the pair’s next move.
Traders should remain cautious, as the market awaits clearer signals to determine the next direction for GBP/USD.
