Market Analysis

GBP/USD Experiences Decline Amid Rising Demand for U.S. Dollar

Dupoin · 03 Oct9.3K Views

GBPUSD

Prediction: Decrease

Fundamental Analysis:

The GBP/USD pair has declined to around 1.3265 in early Thursday's Asian session, driven by increased demand for the U.S. dollar amid heightened geopolitical tensions in the Middle East. The pair dropped nearly 0.7% on Tuesday and hovered near 1.3300 during Wednesday's European session, with no significant recovery momentum from a technical standpoint. Despite a bullish start to the week, the U.S. dollar gained strength as risk aversion continued to support the greenback.

The U.S. Bureau of Labor Statistics reported that job openings rose to 8.04 million in August, surpassing expectations. Later today, the ADP will release its private-sector employment report, with a forecast of a 120,000 job increase. A weaker result could put pressure on the USD, while a strong figure would likely support it. In addition, market attention is on the Middle East crisis, where Israel has vowed retaliation after Iran launched around 200 missiles, intensifying demand for safe-haven assets like the U.S. dollar.

Technical Analysis:

On the 4-hour chart, the Relative Strength Index (RSI) remains below the 50 mark, suggesting that the recent recovery may be a technical correction rather than a full reversal. On the downside, immediate support is seen at 1.3275, with the next key level at 1.3250, where the 100-period Simple Moving Average lies. A daily close below this level could attract additional selling pressure, potentially pushing the pair down to 1.3180.

If the GBP/USD manages to stabilize above 1.3300, it could face resistance around the 1.3340-1.3350 zone, with the next target at 1.3400.

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