GBP/USD Price Analysis: Bears flirt with trading range support, just below 1.2500 mark

• GBP/USD witnessed subdued/range-bound price moves on the last trading day of the week.
• Oscillators on daily/hourly charts support prospects for a break below the trading range.
• Sustained move beyond the 1.2600 mark is needed to negate the near-term bearish outlook.

The GBP/USD pair struggled to gain any meaningful traction and seesawed between tepid gains/minor losses through the early European session on Friday. The pair was last seen trading just below the 1.2500 psychological mark, nearly unchanged for the day.

The US dollar continued drawing support from elevated US Treasury bond yields and turned out to be a key factor that acted as a headwind for the GBP/USD pair. The British pound was further undermined by the UK political jitters, though signs of stability in the equity markets capped the safe-haven buck and helped limit the downside for the major.

Looking at the broader picture, the GBP/USD pair has been oscillating in a familiar range over the past two weeks or so. The 1.2470-1.2460 region has been lending some support to spot prices and should now act as a pivotal point. Meanwhile, technical indicators on daily/hourly charts are holding in the negative territory and support prospects for an eventual breakdown.

It, however, would be prudent to wait for sustained weakness below the trading range support before positioning for any meaningful downside. The next relevant support is pegged near the weekly low, around the 1.2430 region touched on Tuesday, below which the GBP/USD pair could turn vulnerable to accelerate the fall further below the 1.2400 round-figure mark.

Some follow-through selling would expose the 1.2335-1.2330 support zone, which is closely followed by the 1.2300 mark. Failure to defend the latter would make the GBP/USD pair vulnerable to extending the downward trajectory towards the 1.2245 intermediate support and slide further to retest sub-1.2200 levels in the near term.

On the flip side, immediate resistance is pegged near the 1.2530 region. Any subsequent move up might continue to confront stiff resistance and remain capped near the 1.2600 round figure. That said, sustained strength beyond might trigger a short-covering move and lift the GBP/USD pair back towards May monthly swing high, around the 1.2660-1.2665 zone.

GBP/USD 4-hour chart

Key levels to watch