- GBP/USD is positioned above the descending channel, suggesting a weakening bearish bias.
- The descending channel’s upper boundary acts as primary support near the 1.2540 level.
- The immediate resistance appears at its nine-day EMA at 1.2565 level.
GBP/USD retraces its recent losses, trading around 1.2550 during the European hours on Tuesday. The daily chart analysis suggests a weakening bearish bias as the pair is positioned above the upper boundary of the descending channel pattern.
However, the 14-day Relative Strength Index (RSI) remains below the 50 level, suggesting a persistent bearish bias. Additionally, the GBP/USD pair is positioned below its nine- and 14-day Exponential Moving Averages (EMAs), suggesting a weaker short-term price momentum. A decisive break above these EMAs could indicate a shift from bearish to bullish bias.
On the downside, the GBP/USD pair tests the upper boundary of the descending channel near the 1.2540 level. A reversal back into the channel would reinforce the bearish bias, potentially driving the pair toward its seven-month low of 1.2487, last recorded on November 22.
A decisive break below the seven-month low could intensify bearish momentum, potentially driving the GBP/USD pair toward its yearly low of 1.2299, last recorded on April 22. Further downside could target the lower boundary of the descending channel near the 1.2160 level.
On the upside, the GBP/USD pair tests the immediate barrier at its nine-day Exponential Moving Average (EMA) at 1.2565, followed by the 14-day EMA at 1.2585. A successful break above these levels could enhance bullish momentum, opening the path for a move toward the six-week high of 1.2811, reached on December 6.
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