- In Monday’s early European session, GBP/USD falls to 1.2945, down 0.11% on the day.
- The negative image for this pair remains in play below the 100-day EMA and the bearish RSI indicator.
- The first downside target is at 1.2870; the immediate resistance level appears at 1.3000.
GBP/USD extends its decline to around 1.2945 during Monday’s early European session. The bullish US dollar (USD) is dragging the pair down in response to bets on less aggressive policy easing from the Federal Reserve (Fed). In the absence of key economic data from the UK and US, USD price dynamics will continue to play a key role in influencing the pair.
GBP/USD keeps bearish sentiment unchanged as the main pair remains below the key 100-period exponential moving average (EMA) on the daily time frame. The downward momentum is also supported by the Relative Strength Index (RSI), which is below the 50 midline near 37.70, supporting short-term sellers.
The lower boundary of the Bollinger Band at 1.2870 is the initial support level for GBP/USD. A decisive break below this level could result in a drop to 1.2763, the August 13 low. An additional downside filter worth paying attention to is 1.2665, the August 8 low.
On the plus side, the first growth barrier appears at the psychological level of 1.3000. A move beyond the mentioned level could open the door to a climb to the next potential bullish target of 1.3071, the October 18 high. The next obstacle is at the level of 1.3185, the maximum from September 5.
