GBP/USD Price Analysis: Slumps for four days as high US bond yields bolster USD

• GBP/USD drops to 1.2458 and puts the 200-day Moving Average at 1.2424 in focus.
• Short-term outlook shows the pair eyeing the week’s low at 1.2455, with a breach potentially targeting the S2 daily pivot at 1.2413.
• A reclaim of the 1.2500 level could signal a bullish reversal, with the next resistance at the 200-hour Moving Average at 1.2593.

The Pound Sterling (GBP) extended its free fall for four straight days versus the US Dollar (USD) due to high US bond yields underpinning the Greenback. The GBP/USD is trading at 1.2458 after hitting a daily high of 1.2514, as sellers set their sights on technical support to prolong their profits.

GBP/USD Price Analysis: Technical outlook

After breaking an upslope support trendline drawn from around May lows, the major dropped below the psychological 1.2500 figure, which exposed the 200-day Moving Average (DMA) at 1.2424. A breach of the latter would shift the pair’s bias to neutral downwards and expose the May 25 swing low at 1.2308, a crucial support area. That could break the uptrend market structure and pave the way for further losses.

Short-term, the GPB/USD hourly chart shows an attempt by buyers to reclaim the 1.2500 figure. AS buyers failed, the pair dived towards the session’s lows, below Friday’s central pivot point, eyeing the week’s low at 1.2455. A breach of the latter could expose the S2 daily pivot at 1.2413, followed by the 1.2400 mark. Conversely, if traders reclaim 1.2500, that could open the door for further upside, with traders eyeing the 200-hour Moving Average (HMA) at 1.2593 before challenging 1.2600.

GBP/USD Price Action – Hourly chart