It is clinging to 1.3200 in sideways trading

• Exhaustion signals as GBP/USD stagnates after a 400 pip rally, with RSI indicating overbought conditions.
• A daily close below 1.3200 could trigger a pullback, with support levels at 1.3130, 1.3100 and below at 1.3043.
• If the pair breaks above 1.3230, the resistance levels to watch are 1.3250 and the psychological mark of 1.3300.

Sterling starts the week on a positive note but remains around 1.3200, having failed to break last Friday’s new year (YTD) high of 1.3230 and is trading at 1.3204 almost flat.

GBP/USD Price: Technical Insights

Exhaustion is the name of the game for GBP/USD. After making a 400 pip run that started on August 15th^ththe pair failed to extend its gains after reaching a multi-year peak at 1.3230. Today’s price action is forming a “doji”, indicating indecision among buyers and sellers.

Momentum shows that buyers are losing momentum as the Relative Strength Index (RSI) remains overbought. Therefore, if GBP/USD reaches a daily close below 1.3200, it could pave the way for a deeper pullback.

In this outcome, the first support would be the August 22 high at 1.3130 before the pair slips to 1.3100. On further weakness, GBP/USD could touch 1.3043, with the July 17 daily high becoming support.

On the other hand, if GBP/USD rises above 1.3230, the next resistance would be 1.3250, followed by the 1.3300 threshold.

GBP/USD Price Action – Daily Chart