Sell GBPUSD Bearish Channel

GBP/USD has formed a bearish channel pattern on the H1 timeframe, indicating a potential for further downside.

Pattern: The price has been making lower highs and lower lows within the channel, creating a downward sloping trend.
Sell Entry: A break below the channel support at 1.2665 could be an opportunity to enter a short trade.
Targets: Potential bearish targets lie at the support levels of 1.2558 and 1.2498.
Stop Loss: A stop loss could be placed above the channel resistance at 1.2703.

Factors Underpinning the Downward Pressure:

Risk-Off Sentiment: Global markets are facing uncertainties, driving investors to seek refuge in safe-haven currencies like the US dollar. This has put downward pressure on the relatively riskier pound sterling.

BoE Policy Divergence: The Bank of England is expected to raise interest rates at a slower pace than the US Federal Reserve, potentially widening the interest rate differential between the two economies. This could further weaken the pound against the dollar.

Trading Considerations:

Confirm Breakdown: Wait for a clear break below the lower boundary of the channel to validate the bearish momentum and potentially trigger sell trades.

Manage Risk: Implement stop-loss orders above the resistance level to limit potential losses if the price unexpectedly reverses course.

Monitor Fundamentals: Stay informed about economic data releases and central bank communications from both the UK and the US, as they can significantly influence the GBP/USD pair's trajectory.

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