GBP/USD Tests Crucial Support Levels as Investors Seek Safety

Cable came under renewed pressure on Monday as a fresh wave of risk aversion boosted demand for the US dollar, prompting another test of the key support zone at 1.3470. The area, marked by the 38.2% Fibonacci retracement of the 1.3140/1.3675 rally and reinforced by the rising 55-day moving average and bullish trendline off the 1.3140 low, has successfully contained several recent downside attempts.

A sustained break below this temporary higher base would generate a fresh bearish signal and confirm continuation of the decline from the August 21 peak at 1.3675.

Daily technical studies remain firmly negative, with strong bearish momentum and multiple moving-average bear crosses reinforcing the downside bias. The broader fundamental backdrop also favors the dollar, supported by expectations of further Federal Reserve tightening and safe-haven demand amid elevated oil prices and a sharp decline in AI-related stocks. Meanwhile, the Bank of England is widely expected to leave interest rates unchanged at this week’s policy meeting.

A decisive break beneath 1.3470 would expose the converging 200-day and 100-day moving averages at 1.3450 and 1.3440 respectively, followed by the upper boundary of the rising daily Ichimoku cloud and the 50% retracement of the 1.3140/1.3675 advance at 1.3410/07.

Conversely, another rebound from the 1.3470 support zone would likely keep the pair trapped within its extended near-term range. However, the outlook would remain bearish while price action stays capped below the falling 10-day moving average at 1.3516.

Res: 1.3500; 1.3515; 1.3550; 1.3600
Sup: 1.3463; 1.3440; 1.3410; 1.3344