The GBP/USD currency pair experienced a decline on Friday as the Pound Sterling weakened against the US Dollar despite better-than-expected economic data from the UK. The fear of a slowdown in the US economy due to deteriorating consumer sentiment led to a rise in demand for the safe-haven US Dollar. As a result, the GBP/USD pair traded at 1.2510, representing a 0.10% decline.
In terms of technical analysis, the GBP/USD pair saw a retracement towards the 1.2500 level, signaling a potential decrease in spot prices. The failure of buyers to break above the 200-day moving average at 1.2541, along with the bearish Relative Strength Index (RSI), suggests a continuation of the bearish momentum. To maintain this downward trend, sellers would need to breach the May 9 low of 1.2445, leading to a potential decline towards the psychological support level at 1.2400 and the year-to-date low of 1.2299.
On the other hand, if buyers manage to keep the exchange rate above 1.2500, they could attempt to test the resistance levels at the 200-DMA and the 50-DMA at 1.2594. Further resistance lies at the 100-DMA at 1.2635. However, the overall momentum remains bearish as the RSI continues to stay below the 50 level, indicating a challenging path for buyers to overcome.
In summary, the GBP/USD pair faced a decline as sellers showed confidence in pushing the spot price lower. The failure to break above key resistance levels and the bearish RSI signal further downside potential. The focus now shifts to whether sellers can break below the support levels to continue the bearish trend or if buyers can provide enough momentum to push the pair higher. Traders will closely monitor economic data releases and market sentiment to gauge the direction of the GBP/USD pair in the coming sessions.
