- GBP/USD recovers some lost ground near 1.2170 on the softer USD.
- The pair holds below the 50- and 100-hour EMAs; RSI indicator stands in bearish territory.
- The key resistance level is located at 1.2200; 1.2143 acts as an initial support level.
The GBP/USD pair stalls its decline and holds below the 1.2200 mark during the Asian session on Wednesday. A decline of the US Dollar (USD) and a retreat in US Treasury bond yields lend some support to the pair. However, the renewed safe-haven flows amid the geopolitical conflicts in the Middle East and the higher-for-longer rate narrative in the US might cap the USD’s downside for the time being. The pair is adding 0.08% on the day to trade at 1.2170 at press time.
Technically, GBP/USD holds below the 50- and 100-hour Exponential Moving Averages (EMAs) on the four-hour chart, which means further downside looks favorable. Additionally, the Relative Strength Index (RSI) holds below 50 in bearish territory, which supports the sellers for the time being.
That being said, the key resistance level is located at 1.2200, portraying the confluence of the 50-hour EMA and a psychological round figure. Any decisive follow-through buying above the latter will pave the way to a high of October 16 at 1.2218. Further north, the upper boundary of the Bollinger Band at 1.2271 will be the next stop. The additional upside filter to watch is near a high of October 10 at 1.2295.
On the downside, a low of October 23 at 1.2143 acts as an initial support level. The next downside stop is seen at a low of October 13 at 1.2122. The critical contention level will emerge at the 1.2095–1.2100 region. The mentioned level is a round mark, the lower limit of the Bollinger Band, and a low of October 20. A breach of the level will see a drop to 1.2052 (low of October 3).
GBP/USD four-hour chart
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