GBPUSD Reflects Deteriorating Momentum Within An Increasingly Defensive Structure

Market Analysis – January 5

GBPUSD reflects deteriorating momentum within an increasingly defensive structure. GBPUSD is moving into a more fragile technical phase as bullish momentum fades and indicator alignment turns less supportive. Price action has slipped below the short-term moving average near $1.3480, signaling reduced buyer follow-through after the recent rebound. This shift is reinforced by momentum readings, with RSI retreating from prior levels above 60, highlighting easing demand and increasing vulnerability to downside pressure.

GBPUSD Key Levels

Supply Levels: $1.3630, $1.3800, $1.4000
Demand Levels: $1.3330, $1.3050, $1.2710

GBPUSD Long-Term Trend: Bearish

From a technical standpoint, price action continues to respect the broader bearish framework, with repeated rejections from the supply zone between $1.3600 and $1.3720. The most recent recovery attempt failed to achieve follow-through beyond this ceiling, instead forming lower highs that signal ongoing distribution. Downside structural breaks remain valid, while countertrend rebounds have been shallow and consistently capped below resistance at $1.3480 and $1.3630.

Looking ahead, downside risk remains dominant while price holds below $1.3480. A renewed decline would likely draw the market toward initial support near $1.3330, with potential extension toward $1.3250 and possibly $1.3050 if selling pressure intensifies. Only a clear daily close above $1.3630 would invalidate the bearish outlook and delay further weakness, aligning market expectations with prevailing forex signals.

GBPUSD Short-Term Trend: Bearish

On the four-hour chart, GBPUSD is developing a bearish bias as price trades below the short-term moving average near $1.3449, reflecting fading upside momentum. Recent price action shows clear rejection from the $1.3500–$1.3540 supply area, with lower highs confirming distribution dynamics.

Momentum conditions support the downside view, as RSI has slipped below the neutral 50 level and continues to trend lower. A sustained break below $1.3330 would likely accelerate losses toward $1.3248, while any corrective rebound is expected to remain capped beneath the $1.3500 resistance zone.

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