GBP/USD analysis: poised to challenge the critical 1.4000 threshold

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3883

GBP/USD at daily highs as dollar's slide resumed.
Investors waiting for US data before next move.

The Pound remains among the strongest currencies across the FX board, once again attacking the 1.3900 level against the greenback. By the end of Wednesday's US session, the GBP/USD pair soared to 1.3942 its highest since the Brexit referendum, as stops got triggered on renewed dollar's weakness. The pair changed course quite quick, spending the first half of the Asian session drifting lower, to bottom at 1.3804 for the day. Now recovering from the level as dollar's selling resumed, the pair seems poised to extend beyond the mentioned high and challenge the critical 1.4000 threshold.

From the macroeconomic front, the UK calendar had nothing to offer today, but the US will release December housing figures, weekly unemployment claims, and the Philly manufacturing index, none a big mover, but all with the possibility of triggering some short-term action.

The 4 hours chart shows that the intraday slump was contained by buying interest around a still bullish 20 SMA, indicating that bulls lead. Technical indicators in the mentioned chart are now lacking directional strength, amid the price being confined to a tight range as investors wait for the mentioned US data, but anyway within positive territory and with no signs of upward exhaustion. Beyond 1.3900, the pair will likely retest the mentioned high, en route to the 1.4000 price zone, a critical psychological threshold. Dips will likely continue attracting buying interest, as the pair would need to lose over 100 pips, and break below 1.3740 to actually enter bearish ground.

Support levels: 1.3840 1.3800 1.3770

Resistance levels: 1.3900 1.3945 1.3990

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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