GBP/USD meets support around 1.2880, USD remains strong

After bottoming out around the 1.2880 region, GBP/USD now manages to attempt a bounce and flirt with the 1.2900 zone in the wake of weaker-than-expected US data releases.

The Relative Strength Index (RSI) indicator on the 4-hour chart stays close to 50 and GBP/USD trades near the 20-period, 50-period and the 100-period Simple Moving Averages (SMA), reflecting the pair's indecisive action.

On the downside, 1.2900 (lower limit of the ascending channel) aligns as key support level before 1.2800, where the 200-day SMA is located. Looking north, resistances could be spotted at 1.2950 (20-day SMA), 1.3000 (static level, round level) and 1.3050 (mid-point of the ascending channel).

Fundamental Overview

The risk-averse market environment on growing concerns over an aggressive US trade policy weighing on the economic outlook caused GBP/USD to stretch lower at the beginning of the week.

Later in the day, the US economic calendar will feature JOLTS Job Openings data for February and the ISM Manufacturing Purchasing Managers Index (PMI) for March.

In case the headline PMI comes in above 50 and shows an ongoing expansion in the manufacturing sector's business activity, the US Dollar (USD) could gather strength with the immediate reaction.

Nevertheless, investors could remain reluctant to take large positions ahead of US President Donald Trump's tariff announcements on Wednesday, paving the way for choppy action in the pair in the near term.