GBPUSD: Bearish Momentum vs. Fundamental Repricing – Key LevelsGBPUSD is at a critical juncture, balancing a clear technical breakdown with a fundamental backdrop favoring near-term volatility. The pair has slipped from its rising wedge structure and is now testing key retracement zones while markets reprice expectations for Fed rate cuts after weak US jobs data. Traders are closely watching whether this bearish momentum will extend toward the 1.3128 support or if a rebound from oversold conditions could trigger a corrective bounce.
Technical Analysis (8H Chart)
Pattern: Clear breakdown from a rising wedge, confirming bearish bias.
Current Level: Price sits near 1.3278, struggling to reclaim the 1.3300 resistance zone.
Key Support Zones:
1.3128 (61.8% Fibonacci retracement) – main bearish target.
1.2945 (78.6% retracement) – extended downside target if selling pressure deepens.
Resistance Levels:
1.3300 (immediate resistance, prior support now flipped).
1.3380 (secondary resistance if a retracement rally occurs).
Projection: Likely bearish continuation toward 1.3128, with a potential retest of 1.3300 before continuation.
Fundamental Analysis
Bias: Bearish in the short term, but Fed policy and risk sentiment remain key drivers.
Key Fundamentals:
USD: Weak NFP (73K), higher unemployment (4.2%), and downward revisions boost Fed cut bets (~75% for September), typically a USD-negative factor.
GBP: BOE maintains a cautious stance due to sticky inflation but lacks clear hawkish conviction as growth slows.
Tariffs: US tariffs add a mild negative weight on GBP trade sentiment.
Risks:
Hot US CPI could slow Fed cut bets, supporting USD.
Hawkish BOE comments could limit GBP downside.
Global risk sentiment shifts could either favor USD (risk-off) or weaken it further (risk-on).
Key Events:
US CPI and PPI for USD direction.
BOE policy updates and UK CPI.
US jobless claims and Fed commentary.
Leader/Lagger Dynamics
GBP/USD is a lagger, mainly reacting to USD shifts. However, its moves directly influence GBP crosses such as GBP/JPY and GBP/CHF.
Summary: Bias and Watchpoints
GBP/USD remains in a bearish phase, targeting 1.3128 with a potential corrective bounce toward 1.3300 first. The primary driver is the technical breakdown, while fundamentals add volatility around US CPI and BOE policy. If CPI surprises lower, the bearish outlook could reverse into a short-term rebound; if CPI is hot, downside momentum could extend. You should monitor USD-driven events closely as GBP/USD sets the tone for broader GBP movements.
