- GBP/USD declined to the 1.2300 area in the European morning on Tuesday.
- The US Dollar gathers strength amid souring market mood.
- Sellers could remain interested in case GBP/USD fails to stabilize above 1.2300.
GBP/USD came under pressure and declined to the 1.2300 area in the European session on Tuesday. The pair's near-term technical outlook points to a bearish tilt. In the absence of high-impact data releases, the risk perception could impact GBP/USD action in the second half of the day.
After advancing to its strongest level since mid-September at 1.2428 on Monday, GBP/USD turned south and closed in negative territory. The recovery seen in the US Treasury bond yields helped the US Dollar (USD) find demand and didn't allow the pair to build on earlier gains.
At the time of press, US stock index futures were down around 0.3% on the day, reflecting a cautious market stance. In case safe-haven flows dominate the action following Wall Street's opening bell, the USD could continue to gather strength and force GBP/USD to stay on the back foot.
News of the UN Security Council failing to reach an agreement on a draft resolution to end the conflict in Gaza seem to be causing investors to stay away from risk-sensitive assets.
Earlier in the day, the data from the UK revealed that Halifax House Prices rose by 1.1% on a monthly basis in October but this reading did not trigger a noticeable market reaction.
GBP/USD Technical Analysis
GBP/USD was last seen trading within a touching distance of 1.2300, where the Fibonacci 38.2% retracement of the latest downtrend and the 20-period Simple Moving Average (SMA) on the 4-hour chart align. If the pair drops below that level and confirms it as resistance, additional losses toward 1.2260 (static level) and 1.2200 (Fibonacci 23.6% retracement, 50-period SMA) could be witnessed.
On the upside, resistances are located at 1.2340 (static level), 1.2400 (Fibonacci 50% retracement) and 1.2440 (static level).
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