Gbpusd Slides As Us Dollar Gains Strength

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Gbpusd Slides As Us Dollar Gains Strength

GBP/USD Slides Below 1.27 As US Dollar Gains Strength

The GBP/USD pair changed sides and started to trade lower amid a renewed strength in the US Dollar. As a result of bearish momentum, GBP/USD has already slipped under the 1.2700 handle which was regarded as a strong support.

The sudden demand for the US Dollar came after the comments from William (Fed President) in which he said that the talks of a pivot in interest rate policy are still too soon. In simple words, he said that the chances of a shift from rate hikes to rate cuts in the USA is still a premature thing to discuss.

GBP/USD - RSI Reading In Overbought Territory

The pair is already overbought as evident from a 70+ RSI reading. This also means a higher buying interest in the GBP which could allow the pair to stage another bullish comeback very soon.

GBP/USD is trading inside a bullish channel with a mid-point located near the 1.2750. Now that the 1.27 handle is lost, the pair will need to conquer that first before heading towards the 1.2750 resistance zone.

On the contrary, a close under the 1.27 handle on the 4-hour chart will send the pair lower toward the 1.2650 and 1.26 handles.

And if we look at the upside, there are several resistance levels, such as the 1.27, 1.2750, and 1.28 handle. Next up is the 1.2840 level followed by the strong resistance at the 1.29 handle.

A few days earlier, the GBP/USD refreshed monthly highs as it was trading near the 1.28 handle. However, the pair has since moved lower from its multi-month high and is now showing a little selling pressure in the short term.

Although the UK's inflation is facing the risks of weak wage inflation and lower GDP growth, the Bank of England is still not ready to shift towards a dovish policy. This means that the market players can forget about any rate cuts in the near term.

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