GBPUSD remains stable below 1.2700.
GBPUSD gained for the third week in a row before losing ground on Monday. Although the technical view does not yet indicate a buildup of bearish momentum, the pair may have a difficult time turning north, as investors remain cautious.
Furthermore Rising geopolitical tensions in the Middle East prompted a flight to safety at the start of the week, assisting the US Dollar (USD) to find demand. At the time of publication, US stock index futures were down 0.2% to 0.3%.On the day, the price fell by 0.4%. If Wall Street’s main indexes open in the red and continue to fall, GBPUSD could fall more in the second half of the day.
US market index futures are trading in the red as geopolitical tensions rise.
Markets are concerned that the Israel-Hamas conflict will escalate into a wider crisis after the US military shot down three drones in response to Yemen’s Houthi rebels’ attack on three commercial ships in the Red Sea on Sunday.
Moreover there will be no high-impact data releases in the American session, risk perception may continue to be the dominant driver of GBPUSD movement.
On Tuesday, the ISM Services PMI and JOLTS Job Openings statistics from the United States will be scrutinized for new impetus.
GBPUSD Technical Outlook
GBPUSD RSI (Relative Strength Index) indicator on The 4-hour chart has fallen back to 50, indicating a loss of bullish momentum.
On the upside, 1.2700 (static level, psychological level) serves as immediate resistance before 1.2740 (static level) and 1.2800 (static level, psychological level).
On the downside, the 50-period Simple Moving Average (SMA) at 1.2630 could act as dynamic support. Below that level, the next bearish objectives might be 1.2600 (psychological level, static level) and 1.2560 (Fibonacci 23.6% retracement).
