GBP/USD challenges daily tops around 1.2800

GBP/USD maintains its renewed bullish stance on Tuesday, trading at shouting distance from the key resistance at 1.2800 the figure on the back of the marked losses in the Greenback.

GBP/USD Technical Overview

GBP/USD closed below the 200-day Simple Moving Average (SMA), currently located at 1.2815, for the first time since early March on Monday. Meanwhile, the Relative Strength Index (RSI) indicator on the 4-hour chart stays below 40, reflecting a bearish bias.

GBP/USD could face the first support level at 1.2700 (static level, round level) before 1.2630 (100-day SMA) and 1.2600 (static level, round level). On the upside, resistances could be seen at 1.2815 (200-day SMA), 1.2880 (static level) and 1.2930 (20-day SMA).

Fundamental Overview

Safe-haven flows dominated the action at the beginning of the week as US President Donald Trump and White House officials reaffirmed that they will keep tariffs in place. In an interview with Fox News on Monday, Kevin Hassett, Director of the US National Economic Council (NEC), said that Trump is doubling down on something he knows works and added that Trump will listen to trading partners if they offer "really great deals."

During the American trading hours, Trump took to social media to threaten an additional 50% tariffs on China, after China issued retaliatory tariffs of 34% on US goods on Friday. In response, "if the US insists on a trade war, China will fight until the end," China's Foreign Ministry said early Tuesday.

In the European session, US stock index futures rise between 1.5% and 2%, while the UK's FTSE gains about 2%. In the absence of high-impact data releases, the risk perception could continue to influence GBP/USD's action.

A bullish action in Wall Street following the opening bell could support the pair. On the flip side, a negative shift in market mood could open the door to another leg lower.