GBP/USD price regains momentum above 1.2650 due to UK PMI strength
GBP/USD rebounds due to strong UK PMI data
GBP/USD extended its recovery beyond 1.2650 during Monday's European session, fueled by upbeat UK PMI data indicating continued growth in the private sector. The pair broke a three-day losing streak, trading near 1.2640-1.2650, as investors awaited US flash PMI readings for December.
The positive UK economic outlook provided temporary relief, countering earlier bearish sentiment. However, persistent global economic uncertainties continue to pose challenges.
GBP/USD chart (May 2024 - Dec 2024) Source: Trading View
Technical analysis reveals key levels
Technical indicators continue to show mixed signals for GBP/USD. On the upside, key resistance levels include the 1.2750-1.2760 range, marked by the Fibonacci 50% retracement and the 200-period Simple Moving Average (SMA). A break above this zone could propel the pair toward 1.2800 (Fibonacci 61.8% retracement) and potentially 1.2850 (static resistance level).
Conversely, the nine- and 14-day Exponential Moving Averages (EMAs) around 1.2684 remain critical, as the pair has struggled to surpass this descending channel’s upper boundary. A failure to break above could reignite bearish sentiment, pushing the pair toward its four-week low of 1.2487, with further support near the yearly low of 1.2299 recorded in April.
With the 14-day Relative Strength Index (RSI) still below 50, caution persists. Traders are now closely monitoring US economic releases and the Federal Reserve’s upcoming monetary policy decision, which could sway market sentiment and shape GBP/USD’s near-term trajectory.
Previously, we discussed GBP/USD holding steady above 1.2750 due to robust UK housing data and cautious US inflation expectations.
