- GBP/USD is set to continue the move down as the dollar pushes higher.
- A majority of traders are holding short positions on GBP/USD.
- The pair is experiencing strong support at the 1.2500 level in the charts.
The GBP/USD price is trading around the 1.2500 level, near Friday’s close. Friday saw the pair closing on a solid bearish candle after nonfarm payrolls increased more than investors expected. This good news saw the dollar strengthen against the pound. Monday was a slow morning across most markets as they awaited big news releases later in the week, including US inflation.
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The investing.com GBP/USD index released this morning came in at 42.9%, which is bearish for the pair. This weekly index measures overall exposure to the pair using data from futures exchanges and OTC providers on all long and short open positions. 42.9% of traders hold long positions for GBP/USD, showing the more significant percentage is bearish.
The dollar index is holding steady at 102.118 around Friday’s bullish close. In the US, the US Commerce Secretary said on Sunday that Joe Biden was considering lifting some of the tariffs on China imposed by Trump to control runaway inflation.
When asked about it on Sunday, Raimondo told CNN the following.
“We are looking at it. The president has asked his team to analyze that. So, we are doing that for him, and then he can make the decision.”
GBP/USD key events today
There are no critical news releases from the UK and the US. S, the investors will be looking at risk headlines and US dollar for further action.
GBP/USD price technical analysis: Bears struggling at 1.2500
Looking at the 4-hour chart, we see that price is trading below the 30-SMA, showing bearish momentum is back. The RSI, which is trading below the 50 level, confirms this new downward trend. However, the price is also experiencing strong support as it is currently trading at the 1.2500 psychological level. A break of this critical level would see the price move to 1.2400.
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There is also the possibility that the 1.2500 support will hold and push prices higher. A bullish trend would only come about if the price breaks above the 30-SMA and the RSI starts trading above the 50 levels.
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Saqib Iqbal
