- GBP/USD recovers to around 1.2690 in the early European session on Wednesday.
- The bearish outlook remains intact as the pair trades below the 100-day EMA, supported by a bearish RSI.
- Key support is seen at 1.2600, while the initial resistance lies at 1.2750.
The GBP/USD pair remains in positive territory for the second consecutive day, trading around 1.2690 during the early European session on Wednesday. However, the upside potential appears limited as expectations of a less aggressive interest rate cut by the US Federal Reserve (Fed) and concerns over US President-elect Donald Trump's tariff policies may lend support to the US Dollar. Market participants are awaiting further insights on the Fed's interest rate outlook from Chair Jerome Powell's upcoming speech.
The bearish outlook for GBP/USD remains intact, with the pair trading below the critical 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index (RSI) remains capped below the midline at 45.35, indicating that further downside remains a possibility.
The initial support level is seen at the psychological 1.2600 level, with the next downside target located at 1.2467, the lower limit of the Bollinger Band. A break below this level could push the pair towards the April 23 low of 1.2331.
On the upside, the first resistance level lies at 1.2750, the high from November 29. A sustained bullish move could see the pair rally to 1.2875, aligning with the 100-day EMA. Further resistance is seen at 1.2920, the upper boundary of the Bollinger Band.
GBP/USD daily chart
