The GBP/USD pair breached the key 1.2850 level and is now eyeing the 200-day SMA support at 1.2811. A close below this level could lead to further losses, with the next support seen at 1.2664. The Relative Strength Index (RSI) momentum indicates bearish control as election fallout puts pressure on the Pound.
The Pound Sterling experienced a significant drop against the US Dollar on Wednesday following the victory of former US President Donald Trump in the 2024 Presidential election. Concerns about tariffs and protectionist policies weighed on Cable, resulting in its worst daily loss since October 3. At the time of writing, GBP/USD is trading at 1.2881 after reaching a daily high of 1.3047.
In terms of technical analysis, the GBP/USD pair broke below the 1.2850 area and hit a daily low of 1.2833. However, it has not yet tested the 200-day Simple Moving Average (SMA) of 1.2811. A daily close below the 200-day SMA would confirm the bearish bias and could lead to a test of 1.2800. Further support levels to watch for would be at 1.2664, followed by the 1.2600 mark. On the other hand, a bullish scenario would require the pair to surpass the 1.2900 figure and the 100-day SMA at 1.2985.
Momentum indicators, such as the RSI, suggest further downside for the GBP/USD pair. The RSI has shown a steep decline, indicating that sellers are currently in control of the market. The price chart also reflects this bearish sentiment, with the Pound falling against major currencies today and being the strongest against the Euro.
Overall, the GBP/USD pair is facing pressure from election-related uncertainties and fears of protectionist policies. Technical indicators point to a bearish bias, with key support levels to watch for in case of further losses. Traders should keep an eye on developments in the political landscape and economic data releases that could influence the direction of the Pound Sterling against the US Dollar.
