Gbpusd Faces Rejection As Usd Gains Strength

last updated on

Gbpusd Faces Rejection As Usd Gains Strength

GBP/USD Faces Rejection At 1.2100 As USD Gains Strength

During Tuesday's trading session, the GBP/USD pair managed to touch the 1.2100 level, only to get rejected once again. As a result, the pair dropped sharply and found support near the 1.2050 level.

The sudden strength of the USD against the GBP occurred mainly due to the higher job openings in the USA during August. The economic indicator from the US was Dollar positive and thus pushed the GBP/USD lower.

Technical charts show that the GBP/USD price action is contained in a bearish regression channel with a mid-point near the 1.2100 level. So, if the pair can manage to stay above the 1.2100, a move towards the 1.2150 will become a reality.

GBP/USD Faces Hurdles Ahead

After the 1.2150 level, we also have the 1.2175, which aligns with the 20 SMA, and then the 1.2200 resistance level. However, the 1.2200 is still a long story as there are many hurdles before that!

The other scenario is the failure of GBP/USD to go up and cross the 1.2100 level, which indicates a bearish shift in the pair. In this case, the support will be present at the 1.2050, which also happens to the lower end of the regression channel. If the 1.2050 level fails to hold, then the GBP bulls will have to defend the 1.200 level.

For now, the GBP/USD pair continues its bearish descent and has already hit its lowest level, which was seen during March 2023. In addition, the GBP/USD technical indicators are also printing oversold conditions for the short term.

But despite all the oversold readings, the risk sentiment doesn't support any bullish advance in the GBP/USD. So, on that front, there is very little chance of any technical correction.

A look at the UK stock market shows that the sentiment is mostly positive, as the FTSE 100 is already up by 0.4% during the day. This indicates that the market mood is now a little bit positive as compared to the last few days and weeks.

Trending Stories