02 Dec 2024

• GBP/USD trades in the negative territory around 1.2700 in Monday’s early European session. 
• The negative outlook of the pair remains intact below the 100-day EMA, with a bearish RSI indicator. 
• The first downside target to watch is the 1.2600 psychological level; the immediate resistance level is seen at 1.2834.
• The GBP/USD pair experiences a decline towards 1.2700 during the early hours of the European session on Monday, influenced by a stronger US Dollar (USD) overall. Factors such as US President-elect Donald Trump's tariff threats, escalating geopolitical tensions in West Asia, and increasing expectations for less aggressive interest rate cuts by the Federal Reserve bolster the Greenback, creating headwinds for GBP/USD. The release of the US ISM Manufacturing Purchasing Managers Index (PMI) data is anticipated to be a key event on Monday.
  
  From a technical perspective, the outlook for GBP/USD remains negative, with the price trading below the significant 100-day Exponential Moving Average (EMA) on the daily chart. The downward trend of this major pair is further supported by the 14-day Relative Strength Index (RSI), which is positioned below the midline at approximately 44.40.
  
  The initial support level for GBP/USD is identified at the psychological threshold of 1.2600. Continued bearish momentum could lead the pair to the lower boundary of the Bollinger Band at 1.2445. A breach of this level may result in a decline towards 1.2331, which marks the low recorded on April 23.
  
  Conversely, the first resistance level is found at 1.2834, corresponding to the low of November 6. A sustained move above this point could facilitate a challenge of the 1.2890-1.2900 range, which includes the round number and the 100-day EMA. The psychological barrier and the upper limit of the Bollinger Band at 1.3000 are likely to present significant challenges for bullish traders.