09.01.2025
Jainam Mehta
Contributor
09.01.2025

GBP/USD price remains near 1.2350 as bearish trend persists

GBP/USD price remains near 1.2350 as bearish trend persists GBP/USD trades near key support at 1.2350, signaling extended bearish trend

The GBP/USD pair continues to face downward pressure, trading near 1.2360 during early Thursday trading, following its rebound from a nine-month low of 1.2321 recorded on January 8. Despite a brief recovery attempt, the pair remains firmly within the descending channel pattern, indicating a sustained bearish bias.

Traders remain cautious as the pair navigates key support and resistance levels. A decisive move in either direction could signal the next major trend.

GBP/USD price dynamics (Nov 2024 - Jan 2025) Source: TradingView.

Technical overview and key levels

The daily chart shows the pair trading below key support levels, with both the nine-day and 14-day Exponential Moving Averages (EMAs) at 1.2447 and 1.2481, respectively, acting as immediate resistance. The 14-day Relative Strength Index (RSI) approaches the 30 level, suggesting intensified bearish momentum, typically a signal for an oversold condition. However, without a decisive rebound, the pair risks further declines.

If the GBP/USD breaks below the 1.2321 level, the next significant support lies at 1.2299, a low not seen since April 2022. A drop below this could lead to a potential test of the lower boundary of the descending channel near 1.2050, indicating further downside risks.

Potential upside resistance and market outlook

Conversely, should the pair regain upward momentum, a breakout above the upper boundary of the descending channel near 1.2447 could shift sentiment, paving the way for a climb toward the 1.2811 resistance level, last reached in early December. For this to materialize, the pair would need to clear both short-term and medium-term EMAs decisively.

Market sentiment continues to be shaped by broader economic indicators, with traders watching upcoming data releases and Federal Reserve (Fed) updates. Expectations of continued hawkishness by the Fed and ongoing concerns about the UK’s economic outlook add further complexity to the GBP/USD trajectory.

In our previous analysis, the GBP/USD pair was highlighted for its struggle to regain traction amid pressure from elevated US Treasury yields and geopolitical concerns—a trend that continues to shape its performance.

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