Gbpusd Drops As Bears Take Control

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Gbpusd Drops As Bears Take Control

Gbp/Usd Drops Under 1.2500 As Bears Take Control

In the middle of the US trading session, a wave of selling was seen in the GBP/USD, which sent the pair below the 1.2500 support. The catalyst for this drop was an uptick in US inflation, which means the Fed might delay the rate cuts once again.

For now, the GBP/USD is trading near 1.2481, with a net loss for the day. This is a classic sign of USD buyers stepping in while the GBP buyers are selling their holdings.

200 Sma At 1.2667 Keeps Bulls Under Check

If we look back, the GBP/USD pair closed three consecutive days in green, but the trend still favors the bulls. The reason for this is the 200 SMA on the D1 chart at 1.2667. The GBP/USD bulls have managed to turn this dynamic resistance into support.

As a result, revisiting the 1.2500 handle was the most obvious path for the GBP/USD after the release of fundamental news.

According to experts, a weekly close near the 1.2480 handle will be seen as a sign of strong bearish pressure. As a result, the GBP/USD will go through further losses in the next week. The next support levels for the GBP/USD are 1.2450, 1.2400, and 1.2300, which is also the YTD level.

However, if the GBP/USD manages to close the day above 1.2500, it will mean revisiting the 200 SMA on the D1 chart once again.

As far as the long-term trend of GBP/USD is concerned, it is in favor of the bears as the pair is still trading under the 200 SMA. However, if we look at the short-term trend of GBP/USD, it is neutral to bullish as it closed three days in green and one day in red.

Next week, several key releases from both the USA and the UK are due, and this will determine the next direction for the GBP/USD.

It appears the central theme for the GBP/USD has once again shifted towards how the Fed will have to delay the rate cuts campaign once again.

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