GBP/USD Price Declines below 1.3350 as bearish momentum builds amid stronger USD
- GBP/USD declines to around 1.3335 in Monday’s early Asian session.
- The path of least resistance is to the downside as the RSI momentum holds below the midline.
- The initial support level to watch is 1.3230; the first upside barrier emerges at 1.3430.
The GBP/USD pair holds losses near 1.3335 during the Asian trading hours on Monday, pressured by a stronger US Dollar (USD). Escalating conflict in the Middle East pushed Brent crude oil prices above $100 per barrel. This has triggered “stagflation” fears for the UK and weighed on the Cable against the USD.
The Bank of England (BoE) kept interest rates steady at 3.75% at its March meeting last week, as widely expected. BoE Governor Andrew Bailey said that the Middle East conflict will cause a “shock to the economy” that will push up inflation in the near term, adding that restoring safe shipping through the Strait of Hormuz is key to addressing energy price rises.
Technical Analysis:
In the daily chart, the near-term bias of GBP/USD is mildly bearish as spot holds below the flattening 100-day exponential moving average and trades beneath the Bollinger middle band, keeping price action anchored in the lower half of the volatility envelope. RSI around 45 reinforces a loss of bullish momentum rather than outright selling pressure, suggesting sellers retain an edge while dips show measured, not impulsive, downside.
Immediate support emerges at the recent low near 1.3230, where the lower Bollinger Band previously tracked, and a break below this area would expose the next downside level around 1.3160. On the topside, initial resistance sits at 1.3430, aligning with the Bollinger middle band cluster and the 100-day EMA, with a daily close above this cap needed to neutralize the bearish tone and open the way toward 1.3560.
