GBPUSD, Time frame: 1W, Tools: SMA 100GBPUSD, Time frame: 1W, Tools: SMA 100

GBP/USD Technical Analysis

The chart shows GBP/USD continuing to trade sideways near 1.3140, a key support area that has produced several rebounds. The pair is also trying to hold above its 100-week simple moving average. Here are the key technical points to watch:

  1. The 1.3140 area remains a key support zone. A break below this level would signal a bearish outlook for GBP/USD.
  2. The RSI is holding below 50, pointing to continued bearish momentum.
  3. GBP/USD is moving within a diamond pattern, formed by two triangles facing in opposite directions. This formation makes the 1.3140 support level particularly important.

GBP/USD Fundamental Analysis

Monetary policy expectations continue to weigh on the pound, even as the U.S. policy rate range of 3.75% to 4.00% remains close to the UK rate. The rise in U.S. inflation in October has strengthened expectations of tighter Fed policy, supporting the dollar and limiting the scope for a GBP/USD recovery.

Will GBP/USD hold above support at 1.3140, or could a break below that level push the pair to a new low? The pound is trading around 1.3270 and is on track for a second consecutive weekly decline. It has slipped 0.6% so far this week after losing 0.34% last week.