GBP/USD Faces Strong Resistance at 1.3244: Can the Downtrend Extend?

Forex

Summary:

GBP/USD is trading around 1.322–1.324 after falling to a three-month low, with broad USD strength supported by elevated US Treasury yields and expectations of further Fed tightening....

SELL GBPUSD

EXP

TRADING

1.32440

Entry Price

1.32050

1.32700

1.32419 +0.00247 +0.19%

0.0

Pips

Flat

1.32050

Exit Price

1.32440

Entry Price

1.32700

Overview

GBP/USD has remained under pressure as the US dollar benefits from a widening yield advantage. The latest market data places GBP/USD around 1.3224–1.3239 on September 25, after the pair fell approximately 1.25% over the past five trading sessions. The fundamental pressure is significant: the US 10-year Treasury yield has reached around 5.15%, while Fed officials have indicated that additional rate increases remain possible.

Sterling also faces domestic pressure from UK fiscal concerns. Public-sector borrowing in August reached £18.27 billion versus expectations of £15.35 billion, while cumulative borrowing for April–August exceeded the OBR projection by £8.1 billion. This creates a difficult combination for GBP/USD because the dollar is receiving support from higher US yields while sterling is facing uncertainty around the UK fiscal outlook.

At 1.3244, the SELL is therefore positioned as a resistance-retest trade. The entry is above the current spot price and near the 50-period moving-average region, allowing the trade to target continuation toward the recent lows rather than selling after the decline has already extended.

Market Sentiment

The current sentiment remains USD-positive. Forex.com describes the short-term GBP/USD outlook as bearish, citing the widening US yield advantage following the hawkish Fed decision and stronger-than-expected US economic data. At the same time, the pair remains below its 200-day moving average, reinforcing the broader downside structure.

The important complication is that GBP/USD is already technically stretched. Current technical data shows RSI around 39 and Stochastic around 30, while MACD remains negative. This means sellers still control momentum, but the pair is increasingly vulnerable to a temporary short-covering bounce.

That makes 1.3244 more attractive than selling around 1.3210–1.3220. If price rebounds into 1.3244–1.3255 but cannot establish an M15 close above the resistance zone, the retest would provide evidence that sellers are defending the previous breakdown area.

Technical Analysis

GBP/USD Faces Strong Resistance at 1.3244: Can the Downtrend Extend?_1

Using Bollinger Bands (20,0,2), Ichimoku (9,26,52) and Stochastic (5,3,3) on M15, 1.3244 sits inside an important resistance cluster. The current moving-average structure is bearish, with MA50 around 1.3252 and MA100 around 1.3310. A rejection around 1.3244–1.3255 would therefore fit the existing downward structure.

For Bollinger Bands (20,0,2), the preferred setup is a rebound toward the middle/upper portion of the M15 channel followed by rejection. Selling directly at the lower band would create poor entry efficiency; waiting for 1.3244 provides better positioning against resistance.

For Ichimoku (9,26,52), the SELL remains technically valid while price stays below the Kijun-sen and cloud. An M15 rejection from the Kijun followed by a new lower low would strengthen the continuation signal.

For Stochastic (5,3,3), the key is avoiding a SELL while the oscillator is already deeply oversold. Ideally, price first rebounds toward 1.3244 while Stochastic recovers, then produces a bearish crossover. This would signal renewed selling momentum rather than simply chasing an already extended move.

The immediate downside reference is 1.3210–1.3203, followed by a potential extension below 1.3200 if US yields and USD strength remain elevated. Current pivot calculations place S1 around 1.3210 and S3 around 1.3203.

Trade Recommendation

Entry: 1.3244

Take Profit: 1.3205

Stop Loss: 1.3270

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