GBP/USD Price Analysis: Failure at 1.3430 opens the door for a further downfall, towards 1.3200
|- GBP/USD reclaims the 1.3400, as it recovers from three-days previous losses.
- A weaker US dollar boosts the British pound, despite BoE dovishness in its last monetary policy meeting.
- GBP/USD: Failure to hold 1.3400 could send the pair tumbling to the 1.3200 zone.
The British pound bounces off year-to-date lows at 1.3352, edges up 0.40%, trading at 1.3418 during the New York session at the time of writing. In the last three days, cable lost almost 2%, driven mainly by US dollar strength, influenced by higher inflation figures in the US economy, reported by the Labor Department. Also, a dovish stance perceived by investors in the last Bank of England (BoE) monetary policy meeting fueled the slide of the GBP.
US Dollar weakness boost the British pound, which reclaims the 1.3400 figure
The US Dollar Index, which measures the greenback’s performance against its peers, slides 0.03%, sitting at 95.11, acting as a headwind on the USD against the GBP.
GBP/USD Price Forecast: Technical outlook
In the daily chart, the GBP/USD pair is trading within a descending channel, approaching the bottom-trendline around the 1.3350 area. Further, the daily moving averages (DMA’s) reside above the spot price, though supporting the downward bias.
In the case of a daily close above the Thursday high at 1.3433, it could spur an upside move in the pair, towards the psychological 1.3500 area, that also coincides with the 61.8% Fibonacci retracement level, a price level that GBP/USD sellers would defend to resume the downward bias.
On the flip side, failure at 1.3433 could open the door for a further downfall in the GBP/USD pair. The first support would be the Friday low at 1.3353, followed by the bottom of the descending channel around the 1.3300 area, a level last seen in December 2020. A breach of that level would expose December 12, 2020, low at 1.3188.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.