GBP/USD keeps its range below 1.2400, as bulls take a breather ahead of the key UK activity data. The renewed Brexit concerns and UK political jitters remain a drag on the Pound Sterling. The renewed US Dollar weakness keeps the downside cushioned in Cable.

Elsewhere, the US Dollar Index remains sluggish amid an absence of Fed talks and China holidays. On the same line could be the recent struggles between the US and China surrounding the US confrontation with China over companies’ ties to the Russian war effort and the US debt ceiling in the Senate seemed to have probed the GBP/USD pair’s upside momentum.

The quote extends the previous day’s rebound from the 21-SMA, around 1.2350 by the press time.

In addition to the 21-SMA, an upward-sloping support line from January 06, close to 1.2340 at the latest, also restricts the short-term downside of the Cable pair.

Should the quote drops below 1.2340 support, the 200-SMA level surrounding 1.2165 will act as the last defense of the GBP/USD pair buyers, a break of which won’t hesitate to give control to the bears targeting the 1.2000 psychological magnet.

It’s worth noting that the RSI (14) is near the overbought territory, which in turn highlights a 1.5-month-old resistance line near 1.2435 as the key challenge for the GBP/USD bulls.

Following that, the previous monthly high near 1.2450 will be crucial to watch as a clear upside break of the same could propel the quote toward May 2022 high near 1.2670.

In a case where the GBP/USD price remains firmer past 1.2670, the March 2022 low around the 1.3000 round figure will be in focus.

Cables sideways correction seems to be ending

Jan 24 2023