GBP/USD has been trading around the 1.2550 level during the European hours on Tuesday, retracing its recent losses. The daily chart analysis shows a weakening bearish bias as the pair is positioned above the upper boundary of the descending channel pattern. This suggests that the GBP/USD may continue to move higher in the near term.
One of the factors driving the GBP/USD higher is the decline in US Treasury yields, which has led to a weaker US Dollar. This has contributed to the upside movement of the pair during the Asian trading hours on Tuesday. The subdued US Dollar has provided support to the Pound, allowing it to hold gains near the 1.2550 level.
Despite the recent gains, GBP/USD remains in a congestion zone as it trades around 1.2550. The pair started the new trading week with a down day on Monday, falling slightly below the 1.2550 level. The lack of any meaningful UK data releases this week leaves the Pound at the mercy of broader market flows, especially in a tepid year-end environment. This has kept GBP/USD trapped in a near-term congestion pattern.
Overall, the GBP/USD continues to test the nine-day EMA above the descending channel near 1.2550. The daily chart analysis suggests a weakening bearish bias, indicating a potential for further upside movement in the near term. The decline in US Treasury yields and a weaker US Dollar have supported the Pound, allowing it to hold gains near the 1.2550 level. However, the congestion zone and lack of meaningful UK data releases may limit the pair’s movement in the coming days. As investors navigate through the year-end environment, broader market flows will likely play a significant role in determining the direction of the GBP/USD.
