The GBPUSD has been falling because of weak UK economic data and a strong US dollar, which is influenced by inflation worries related to high U.S. tariffs. Concerns about slower global growth have also pushed more investors into the dollar, putting additional pressure on the pound. Currently, GBPUSD is in a critical swing area between 1.3411 and 1.3514, hitting a low of 1.3495 today before bouncing to 1.3504. The hourly chart shows a decline that has dropped below the 61.8% retracement level of 1.3529, moving away from the 100-hour moving average.

Crucial Resistance Levels

The pound has slipped below a swing area between 1.3505 and 1.3514, with a low of 1.3495 now setting this range as resistance. A rise above 1.3514 and the 61.8% level at 1.3529 would challenge the current downtrend. The 61.8% retracement level is key; staying below it suggests more downside ahead. However, if the price goes above this level, the short-term outlook may improve. The market is reacting strongly to policy changes and economic indicators, especially from the U.S. The pound’s drop below the significant 1.3514 level indicates bearish control in the short term. The breach of the 1.3529 retracement line shows that the earlier rebound is losing strength.

Key Technical Supports

Since the 1.3495 level has been reached, there isn’t much immediate technical support until the earlier monthly lows around 1.3430 to mid-1.34s become relevant. These lower areas were tested last quarter, but the speed of the current drop is different. Previous recoveries faced smaller dips and clearer rebounds, which is not the case now. Attention should be on failed attempts to push back through the resistance of 1.3514–1.3529. This range previously supported buyers, but now that it has flipped to resistance, retests from below are likely to lead to selling instead of buying. Once support breaks, it becomes a ceiling. For now, any rallies into this area are seen as pressure points rather than reversal points. Momentum traders will keep pushing lower unless a strong catalyst for reversal appears, and currently, there isn’t much on the calendar to suggest that. Another factor to watch is the dollar’s strong position in global trade. With tariffs being discussed again and inflation data remaining high, the dollar remains strong against other currencies, impacting the pound. Tighter spreads may appear intermittently, but they haven’t changed the trend. Prices are showing a heavy tone below the 100-hour moving average, indicating sellers remain in control. The volume supporting this drop shows it’s a motivated move, not just a slow decline. Until there’s a significant push back through the retracement levels, attempts to rise may stall. We’re not anticipating a long-term bullish trend while prices stay below their hourly range. The critical point is if the price drops below 1.3480. If it does, short-term stops could push the price down to 1.3450 and then 1.3411, levels that showed stability previously but may struggle given the current sentiment. In the upcoming sessions, we’re looking for a clear structure. More lower highs at resistance will reinforce the downward trend. Conversely, a strong close above the retracement area, with continued momentum in the next hour, could suggest a pause. However, without follow-through, these counter-moves will likely fade. Always focus on ranges rather than isolated levels. Watching for retests and failed breakouts can provide cleaner opportunities than trying to predict direction. Let the levels speak for themselves. Create your live VT Markets account and start trading now.

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