GBP/USD Technical Analysis: Bearish Bias Persists Despite Short-Term Gains

Market Overview

The GBP/USD pair has experienced gains for two consecutive sessions, supported by a softening U.S. Dollar. However, bullish momentum remains limited as the U.S. Dollar retreats from yearly highs reached on Thursday, failing to establish a sustainable breakout.

Fundamental and Technical Constraints

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Despite the recent price recovery, the British Pound faces headwinds from ongoing political uncertainty within the United Kingdom. This environment discourages aggressive buying, capping upside potential for the currency pair. From a technical standpoint, the market remains cautious following the decline below the 1.3300 level earlier this week.

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Technical Indicators and Momentum

The 4-hour chart reveals a bearish outlook, reinforced by the pair’s failure to break above the 200-period Simple Moving Average (SMA). The Relative Strength Index (RSI) currently hovers near the 50 level, signaling a period of consolidation rather than a decisive trend shift. Additionally, the MACD histogram, while slightly above the signal line, shows insufficient momentum to reverse the broader two-month downtrend.

Key Price Levels

Resistance is currently concentrated around the 50-period and 100-period SMAs. For a meaningful shift in sentiment toward a recovery, buyers must clear the 200-period SMA situated at 1.3382. On the downside, the 1.3110–1.3115 range acts as the immediate support level following the recent test of the 1.3140 lows recorded on Wednesday.

Outlook

The overall market structure favors sellers, and intraday price movements remain prone to volatility without significant structural support. Traders are advised to monitor the 1.3382 resistance level as the critical pivot point for any potential change in the prevailing bearish outlook.

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