"Market Volatility: GBP/USD Short-term Upward Outlook

The British pound (GBP) showed modest recovery against the US dollar in Monday's US trading session. However, short-term demand for the GBP/USD pair remains low due to escalating tensions in the Middle East and speculation that the Bank of England (BoE) will commence interest rate cuts earlier than the Federal Reserve.

The British pound experienced a strong sell-off after breaking through the psychological support level at 1.2500. The long-term trend of the GBP/USD pair has shifted to a downward trajectory as it fell below the Simple Moving Averages (SMA). Additionally, the Relative Strength Index (RSI) plummeted below 40.00, signaling a strong indication for a new downward trend.