GBPUSD Analysis
Afternoon Session: Exploring Pound: Tight ranges, BoE shifts, Technical insight suggesting bearish outlook?
Highlights:
- GBP/USD pair remains within a tight trading range of 1.2600–1.2645 in early European trading hours
- Bank of England Governor Sarah Breeden hint at a shift in the central bank's stance.
- Technical analysis suggests a bearish outlook for GBP/USD, with the pair below the 100-period Exponential Moving Average (EMA).
The GBP/USD pair is currently in a consolidation phase, trading within a narrow range of 1.2600–1.2645 during the early European trading hours on Monday. Last week, Bank of England (BoE) Governor Sarah Breeden mentioned a shift in the central bank's stance from considering rate tightening to contemplating when rates might decrease, influenced by recent declines in UK inflation. Traders are adopting a cautious approach, waiting for the upcoming UK labor market data scheduled for Tuesday. As of now, GBP/USD is at 1.2630, showing a minimal gain of 0.01% for the day.
From a technical standpoint, GBP/USD maintains its bearish outlook, remaining below the 100-period Exponential Moving Average (EMA) on the four-hour chart. The Relative Strength Index (RSI) around the 50 midline suggests a lack of clear direction in the pair.
A definitive breakthrough above the upper limit of the Bollinger Band at 1.2645 could trigger a rally towards the 100-period EMA at 1.2655. Further upside targets include the high of January 30 at 1.2721, followed by the high of January 31 at 1.2750.
On the downside, initial support is identified in the 1.2600–1.2610 range, encompassing the lower boundary of the Bollinger Band, a psychological round mark, and a low from February 9. A breach of this level might lead to a decline towards the low of February 8 at 1.2572 and the low of December 11 at 1.2535.
Support and Resistance Levels:
