GBP/USD PRICE FORECAST: EXTENDS LOSSES BELOW 1.3150 POST US CPI DATA
- GBP/USD drops below the 20-DMA, with sellers gaining near-term control as RSI nears a break below 50.
- Key support lies at 1.3044 (July 17 peak), with further downside risks toward 1.2995 (50-DMA) and 1.2894 (March 8 high).
- Buyers need to hold above 1.3150 for a recovery, targeting resistance at 1.3111 and the psychological level of 1.3200.
The Pound Sterling dropped during the North American session, down 0.30% after UK data showed the economy is slowing down. This and a pick-up in US inflation weighed on the GBP/USD, which trades at 1.3035 after reaching a daily high of 1.3111.
GBP/USD Price Forecast: Technical outlook
The uptrend remains intact, but the GBP/USD drop below the 20-day moving average (DMA) gives sellers an edge in the near term.
The Relative Strength Index (RSI) clings to the bullish side, but a break below the 50-neutral line looms, which could accelerate the downfall and threaten to clear key support levels.
If GBP/USD clears 1.3050, the first support would be the July 17 peak at 1.3044. On further weakness, the pair might drop to the 50-DMA at 1.2995. A breach of the latter will expose the March 8 daily high at 1.2894.
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