- GBP/USD oscillates in a trading range between 1.2600 and 1.2645 on Monday.
- The main pair maintains a bearish outlook below the key EMA; The RSI indicator shows non-directional action.
- The first upside barrier appears at 1.2645; the initial support level is located in the 1.2600-1.2610 zone.
GBP/USD pair consolidating in a narrow trading range of 1.2600-1.2645 during early European trading hours on Monday. The Bank of England Governor (BoE) Sarah Breeden said last week that the central bank had moved from tightening rates to thinking about when they might fall, as the recent drop in UK inflation changed the BoE's outlook. Traders prefer to wait on the sidelines ahead of UK jobs data on Tuesday. At press time, GBP/USD is trading at 1.2630, up 0.01% on the day.
Technically, GBP/USD maintains a bearish outlook as the pair is below the 100-period exponential moving average (EMA) on the four-hour chart. It is worth noting that the Relative Strength Index (RSI) is hovering around the 50 mid-line, which indicates a non-directional action of the pair.
A decisive break above the upper Bollinger band at 1.2645 will see the 100-period EMA rise to 1.2655. Another bullish filter to watch is the January 30 high at 1.2721, en route to the January 31 high at 1.2750.
On the other hand, the initial support level is in the 1.2600-1.2610 area, showing the lower boundary of the Bollinger band, the psychological round mark and the February 9 low. Violation of this level will lead to a drop to a minimum. February 8 at 1.2572 and December 11 low at 1.2535.