GBP/USD Price Chart showing lowest level since November 2023 amid US Dollar strength.

GBP/USD Price Forecast: Dives to its Lowest Level Since November 2023 Amid Relentless USD Buying

The GBP/USD pair continues to experience downward pressure, plummeting to its lowest level since November 2023. With concerns surrounding stagflation and the UK’s fiscal health, the British pound remains underperforming against a robust US dollar. Bolstered by the Federal Reserve’s hawkish stance, the US dollar’s strength continues to overshadow the GBP.

Key Takeaways:

  • GBP/USD has dropped to its lowest level since November 2023, trading near 1.2125.
  • Stagflation fears and fiscal concerns in the UK are pressuring the pound.
  • The US dollar remains strong, supported by expectations of a prolonged hawkish Federal Reserve stance.
  • The RSI on the daily chart signals oversold conditions, suggesting caution before further downside moves.

GBP/USD Faces Continued Selling Pressure

For the fifth consecutive day, GBP/USD is under heavy selling pressure, reaching a significant low around 1.2125 during Monday’s Asian session. Concerns about stagflation and the UK’s fiscal outlook are weighing heavily on the British pound, pushing it down against the US dollar. Meanwhile, the US dollar continues to gain strength, driven by the market’s expectation that the Federal Reserve will maintain its current stance on interest rates, putting further strain on the GBP/USD pair.

The US Dollar’s Bullish Sentiment

The US dollar has been strengthening against multiple currencies, including the British pound. This trend is largely due to expectations that the Federal Reserve will pause its rate-cutting cycle, keeping borrowing costs high for a prolonged period. Additionally, stronger-than-expected US economic data and a solid labor market have fueled this bullish sentiment surrounding the US dollar, leading to further losses for GBP/USD.

For more on Federal Reserve policy, check out Federal Reserve official updates.

Technical Outlook: Oversold RSI and Potential for Rebound

Technically, the Relative Strength Index (RSI) on the GBP/USD daily chart has fallen below 30, suggesting that the pair is oversold. This condition often leads to short-term consolidation or a mild recovery before any further declines. If the pair begins to recover, resistance can be expected around the 1.2200 mark. A break above this level could trigger a short-covering rally, pushing the price toward the 1.2245-1.2250 range. However, any sustained movement higher may face significant resistance at the 1.2300 level.

For more on technical analysis, visit Investopedia Guide on RSI.

Key Levels to Watch for GBP/USD

Looking ahead, the GBP/USD pair remains vulnerable to further losses if the broader bearish trend persists. A break below the 1.2100 level could bring the pair closer to testing the November 2023 low. Further downside could lead to levels around 1.2035, with the 1.2000 psychological mark in focus as the next major support.

On the upside, the key resistance levels for GBP/USD are 1.2200, followed by 1.2300, while support is seen at 1.2100 and 1.2000.

Key Currency Movements Today:

CurrencyUSDEURGBPJPYCADAUDNZDCHF
USD0.29%0.56%-0.24%0.12%0.20%0.18%0.06%
EUR-0.29%0.25%-0.47%-0.11%0.06%-0.05%-0.14%
GBP-0.56%-0.25%-0.73%-0.35%-0.21%-0.30%-0.39%
JPY0.24%0.47%0.73%0.35%0.36%0.28%0.31%
CAD-0.12%0.11%0.35%-0.35%0.04%0.06%0.03%
AUD-0.20%-0.06%0.21%-0.36%-0.04%-0.13%-0.18%
NZD-0.18%0.05%0.30%-0.28%-0.06%0.13%-0.09%
CHF-0.06%0.14%0.39%-0.31%-0.03%0.18%0.09%

Conclusion: Bearish Bias Amid USD Strength

In summary, GBP/USD is currently in a bearish trend, driven by concerns about the UK’s economic instability, including fears of stagflation and fiscal issues. Meanwhile, the US dollar remains strong, supported by expectations of continued hawkish policies from the Federal Reserve. While technical indicators show that the pair may be oversold, the outlook remains tilted toward further downside, with potential for additional weakness in the GBP/USD pair in the near term.

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