08 Jan 2025

GBP/USD may approach the upper limit near the 1.2560 mark in an attempt to re-enter the descending channel.

The 14-day RSI remains below the 50 threshold, suggesting ongoing bearish momentum.

Initial resistance is observed at the nine-day EMA, positioned at the 1.2494 level.

The GBPUSD pair maintains its position after registering losses in the previous session, hovering around 1.2480 during Wednesday's Asian hours. Technical analysis on the daily to a weakening bearish trend, as the pair is trading above the upper boundary of a descending channel pattern.

Despite this, the 14-day Relative Strength Index (RSI) remains below the 50 level, signaling continued bearish pressure. Furthermore, the pair is positioned below both the nine- and 14-day Exponential Moving Averages (EMAs), indicating weak short-term price momentum. A clear breakout above these EMAs could signal a shift from a bearish to a bullish outlook.

On the downside, GBP/USD could test the upper boundary near the 1.2560 level, potentially re-entering the descending channel. A reversal into the channel would reinforce the bearish bias, possibly driving the pair toward the nine-month low of 1.2352, recorded on January 2. The next support level is at 1.2299, the lowest since November 2023, last seen on April 22.

The GBP/USD pair faces immediate resistance at its nine-day Exponential Moving Average (EMA) at 1.2494, followed by the 14-day EMA at 1.2516. A successful breakout above these levels could boost short-term price momentum, opening the door for a move toward the two-month high of 1.2811, reached on December 6.