GBP/USD Technical Analysis: Bearish Pressure Persists as Pound Eyes 1.2329 Level

Early in the European session, the British pound is trading around 1.2443 below the 21 SMA and the 200 EMA. The 1-hour chart shows that the British pound reached the 1.2542 level and failed to consolidate above that level. We see a strong technical correction today, and the instrument is likely to continue falling towards the 5/8 Murray level over the next few days around 1.2329.

GBP/USD pair fell more than 100 pips in light of the solid data from the US labor market to a daily low of 1.2426 reached today in the European session. The upbeat US data indicates a possible reconsideration of further interest rate hikes by the Federal Reserve. So, GBP/USD will be under bearish pressure in the short term and could reach the psychological level of 1.20.

In the chart above, we can see that the British pound broke the downtrend channel but left a gap at about 1.24494. In the next few hours, GBP/USD could rebound and cover this gap. It could reach 1.2451 (6/8 Murray) and the 21 SMA around 1.2476. In case the British pound falls below 1.2420, it is expected to extend its decline.

Hence, GBP/USD could reach 5/8 Murray at 1.2329. The eagle indicator is giving a negative signal. Therefore, any technical bounce below the psychological level of 1.25 will be considered an opportunity to sell.

On the other hand, a pullback towards the SMA 21 located at 1.2476 or towards 1.2480 could be seen as a signal to sell, since the daily pivot point is located there. This serves as a signal that the pound could continue falling in the next few days.

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