GBP/USD Price Analysis: Pierces the 1.3700 figure for the first time since October 2021
|- The GBP/USD rallies amid broad US dollar weakness across the FX board for the fourth consecutive trading day.
- GBP/USD Technical Outlook: Neutral-bullish biased though GBP bull’s need to reclaim the 200-DMA so that they could aim towards 1.3900.
The British pound extends its rally in the week, advancing for the fourth day in a row as the Asian Pacific session kicks in. The GBP/USD edges up some 0.02% at press time, trading at 1.3705.
GBP/USD Price Forecast: Technical outlook
On Wednesday, the GBP/USD rallied 100-pips fundamentally driven by US inflation hitting the 7.00% threshold the most since 1982, as commented by Joel Frank, an analyst at FX Street, on his article GBP/USD surges towards 1.3700 as dollar dives post-CPI, but now looking overbought.
Putting fundamentals aside, the GBP/USD upward move stalled around the 1.3700 figure, 31 pips short of the 200-day moving average (DMA), which lies at 1.3733, leaving the British pound exposed to downward pressure, unless GBP bulls reclaim the DMA mentioned above.
At the time of writing, the GBP/USD first resistance is the 200-DMA. A breach of the latter would expose October’s 20 of 2021, daily high at 1.3834, followed by September 14 of 2021, daily high at 1.3913.
Conversely, on the downside, the GBP/USD first demand area would be 1.3700. A clear break under the figure could send the pair tumbling towards 1.3600, followed by the 100-DMA at 1.3549 and then the 1.3500 thresholds.
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