- GBP/USD seems to hold its position above 1.2730 on the hawkish stance of BoE.
- MACD suggests a transition to a bearish market sentiment.
- A breach below 1.2700 could push the pair toward the 23.6% Fibonacci retracement at 1.2643.
GBP/USD looks to halt a two-day losing streak, trading slightly higher near 1.2730 during the Asian hours on Tuesday. The GBP/USD pair receives upward support from the hawkish stance of the Bank of England (BoE), coupled with the speculation on the Federal Reserve’s (Fed) dovish stance on the interest rate trajectory in the first quarter of 2024.
However, the technical indicators for the GBP/USD pair are signaling a bearish momentum. The 14-day Relative Strength Index (RSI) below the 50 level indicates downward pressure, suggesting a weaker outlook for the GBP/USD pair.
Additionally, the Moving Average Convergence Divergence (MACD) line is positioned above the centerline but has crossed below the signal line. This shift indicates a potential transition to a bearish market sentiment.
The 14-day Exponential Moving Average (EMA) at 1.2705 aligned with the psychological level at 1.2700 appears to be the key support region. A breach below the region could put downward pressure on the GBP/USD pair to navigate the area toward the major support at 1.2650 lined up with the 23.6% Fibonacci retracement at 1.2643.
On the upside, the 1.2750 level could act as the major barrier following the psychological level at the 1.2800 level. A firm breakthrough above the latter could support the GBP/USD pair to approach December’s high at 1.2827 level before the major level at 1.2850.
GBP/USD: Daily Chart
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(This story was corrected on January 2 at 08:00 GMT to say, in the second paragraph, that the 14-day RSI indicates downward pressure for the GBP/USD pair, not EUR/USD.)
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