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The pound has held onto its gains versus the US dollar, as it retraced from its three-week highs following a softer-than-expected US Nonfarm Payrolls report. Buyers lacked the strength to keep prices above the 1.2600 level, opening the door for a test of the 200-day moving average (DMA). The GBP/USD has been seen trading at around 1.2541, down by 0.06%.
GBP/USD Price Analysis: Technical Outlook
The daily chart suggests the GBP/USD spike that breached the 50- and 100-DMA, reassembling a ‘shooting star,’ opened the door for sellers to enter the market and dragged the spot price toward current levels. Even though the Relative Strength Index (RSI) suggests that buyers are in charge, it seems to have shifted flatly, which is an indication of normalization.Therefore, as GBP/USD bulls lose steam, that could pave the way for a deeper pullback. The first support is seen at the 1.2500 mark. A drop below that level would expose the May 2 low at 1.2474, ahead of the latest pivot low at the 1.2466 figure. Once those two levels are surpassed, up next would be the 1.2400 psychological level.Conversely, if buyers moved in, the first resistance would be the 200-DMA at 1.2548. Further upside is seen at the 1.2600 mark, followed by the 50- and 100-DMAs, each at 1.2612 and 1.2644, respectively.
GBP/USD Price Action – Daily Chart
GBP/USD Technical Levels
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