The GBP/USD pair experienced a decline last week, dropping from 1.3433 to a low of 1.2596. This downward trend is expected to continue this week, with a potential further fall towards the 1.2456 level. However, if the pair manages to break above the 1.2719 resistance, the short-term bias could turn neutral. It’s important to note that the overall outlook remains bearish as long as the 1.2842 level, which has now turned into a resistance, holds.
Looking at the bigger picture, it appears that a medium-term peak was reached at 1.3433, and the current price movements are likely part of a correction within the larger uptrend that started from the 1.0351 low in 2022. As long as the 55-day EMA, currently at 1.2977, remains a strong resistance, a deeper decline towards the 38.2% retracement level at 1.2256 is expected, with a key structural support level at 1.2298 that could potentially trigger a rebound.
In the long term, as long as the 1.2298 support level holds, the overall uptrend from the 1.0351 low is expected to continue. However, the outlook remains somewhat neutral as long as the 1.4248 structural resistance level remains intact. Traders and investors should keep a close eye on these key levels to gauge the future direction of the GBP/USD pair.
