GBP/USD traded near 1.3230 in Asian trading on Friday after falling by over 0.5% the previous day. On the daily chart, the pair remains inside a descending channel, which points to a bearish bias.
The pair is below the nine-day and 50-day Exponential Moving Averages (EMAs), which are limiting rebounds. Price action has posted lower highs and lower closes from the 1.35 area.
Momentum Remains Bearish
The 14-day Relative Strength Index (RSI) is in the low-40s, which signals negative momentum and is not yet in oversold territory. This suggests scope for further downside.
Support sits near the lower channel boundary around 1.3150. A break below the channel could bring 1.3010 into view, the lowest level since April 2025, set in November 2025.
Resistance starts at the nine-day EMA at 1.3273. Further resistance is at the 50-day EMA at 1.3394 and the upper channel boundary near 1.3440.
A sustained move above this resistance area would shift the bias higher and could target 1.3869. That level is the highest since September 2021 and was reached on 27 January.
Options Strategies And Risk Framing
Given the persistent bearish trend in GBP/USD, we see the descending channel pattern holding firm. The price staying below the key nine-day and 50-day moving averages confirms that selling pressure remains the dominant force. This technical setup suggests that strategies benefiting from a further decline or sideways movement are favorable.
For those anticipating more downside, buying put options with a strike price near the channel support of 1.3150 could be a primary strategy. The Relative Strength Index is not yet in oversold territory, which supports the idea that there is more room for the pair to fall. We remember the lows around 1.3010 from last November 2025, which serves as a psychological target if the channel breaks.
This view is strengthened by recent fundamental data diverging between the two economies. Last week’s US jobs report showed a robust addition of 215,000 new jobs, bolstering the Federal Reserve’s case for maintaining its firm monetary policy. Conversely, the latest UK retail sales figures contracted by 0.5%, signaling a potential slowdown that could make the Bank of England hesitant to act.
This policy divergence is reflected in the bond markets, where the yield spread between US 10-year Treasuries and UK Gilts has widened to its highest point this year. As long as this spread favors the US dollar, it creates a fundamental headwind for the GBP/USD pair. This reinforces the technical weakness we have been observing since the peak we saw on January 27.
On the other hand, to manage risk or to profit from the resistance holding, we could consider selling out-of-the-money call options. A bear call spread with strikes placed above the 50-day EMA at 1.3394 and the channel top near 1.3440 would be a defined-risk way to capitalize on the upside being capped. This allows us to collect premium while the bearish trend continues to play out in the coming weeks.
