GBP/USD Faces Downside Pressure Amid Dollar Demand

GBP/USD Faces Downside Pressure Amid Dollar Demand

In the early European session on Wednesday, GBP/USD finds itself trading under pressure below the 1.2560 level. The renewed demand for the US Dollar is a significant factor contributing to the pair's weakness. Market sentiment remains cautious as traders await key US economic data and the UK Autumn Forecast.

Despite hawkish commentary from the Bank of England (BoE), the Pound Sterling is struggling to gain traction. As anticipated in the previous forecast, the price reacted under the 1.26000 level. The H1 timeframe chart reveals a divergence in the RSI, signaling potential downside. Furthermore, the analysis considers the value gap from the previous week's economic news, suggesting indications for a deeper retracement. The correlation with the EUR/USD aligns with a bearish scenario in the near term.

Simultaneously, the UK's FTSE 100 Index opened lower, showing a 0.5% loss. US stock index futures mirrored this trend, turning negative after a quiet Asian session. The possibility of safe-haven flows returning to the market in the second half of the day may prompt the US Dollar to shake off bearish pressure, limiting GBP/USD's upside potential. Traders will closely monitor developments in the coming hours for clearer market direction.

Below 1.2600 look for further downside with 1.24500 & 1.23700 as targets.

Yesterday Idea :

Trade closed: target reached: