GBP/USD Forecast: traders await a decisive breakthrough 2-week old trading range
|On Wednesday, the ongoing US Dollar upsurge exerted some initial selling pressure around the GBP/USD pair, albeit once again failed to push it through the 1.3450 support area. Mixed US economic data prompted some USD profit-taking and helped the pair to defend a near-term trading range support, held over the past two weeks.
The British Pound got an additional boost from reports, saying that the UK is prepared to stay in the customs union beyond 2021. The pair jumped back to the very important 200-day SMA during the Asian session on Thursday but lacked any strong follow-through. Surging US Treasury bond yields, which tends to underpin the greenback demand, might continue to keep a lid on any meaningful up-move for the major amid empty UK economic docket.
Later during the early NA session, the second-tier US data - the usual weekly initial jobless claims and Philly Fed Manufacturing Survey for May would be looked upon to grab some short-term trading opportunities.
Technically, the pair lacks any firm near-term directional bias and remains confined in a broader trading range. Hence, traders are likely to wait for a decisive break through the near-term trading range before positioning for the next leg of directional move.
From current levels, any subsequent up-move is likely to confront strong resistance near the 1.3600-1.3610 region, above which a bout of short-covering could lift the pair back towards a medium-term ascending trend-line support break-point, now turned resistance, near mid-1.3600s. A follow-through buying now seems to assist the pair to easily surpass the 1.3700 handle and aim towards testing its next resistance near the 1.3750-55 region.
On the flip side, weakness below the key 1.3500 psychological mark might continue to find strong support near mid-1.3400s, coinciding with 38.2% Fibonacci retracement level of the 1.1987-1.4377 strong up-move. A convincing break below the mentioned support would point to a fresh bearish breakdown and pave the way for an extension of the pair’s prior depreciating slide, initially towards the 1.3400-1.3390 horizontal support and eventually towards the 1.3310-1.3300 region.
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