GBP/USD: Range bound around 1.3800 amid softer USD, Brexit jitters
|- GBP/USD is trading directionless around 1.3800
- Brexit concerns offset the US dollar’s weakness amid mixed markets.
- The cable remains trapped between 21 and 200-DMAs, with bearish RSI.
GBP/USD is alternating between gains and losses around the 1.3800 level, looking vulnerable amid looming Brexit concerns.
Although, the GBP bulls continue to fight for control, as the US dollar remains on the defensive amid mixed clues on the Fed’s next policy move.
On the latest update, post-Brexit trade frictions have "significantly altered" freight traffic between Ireland and Britain and sparked a steep rise in volumes to and from Ireland and other European Union members, Reuters reports, citing an Irish government agency report.
Meanwhile, the European Union (EU) citizens have missed the deadline to apply to stay in the UK, which could trigger a fresh Brexit backlash between the Kingdom and Brussels.
Looking ahead, the US dollar’s price action, Brexit updates and covid stats will continue to influence the major ahead of the Preliminary Michigan Consumer Sentiment data.
GBP/USD technical outlook
GBP/USD remains trapped in a narrow between the 21-Daily Moving Average (DMA) at 1.3829 on the upside while the losses appear capped by the ascending 200-DMA at 1.3777.
However, with the 14-day Relative Strength Index (RSI) still hovering below the midline, the odds for a potential downside seem higher.
A breach of the 200-DMA support could call for a test of the $1.3750 demand zone.
Alternatively, acceptance above the 21-DMA could reinforce recovery towards the downward-sloping 50-DMA at 1.3887.
GBP/USD daily chart
GBP/USD additional levels to watch
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