GBP/USD analysis: trims daily gains, at risk of breaking key 1.4000

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4034

GBP/USD completed a pullback to a broken trend line before turning south.
UK Markit PMIs on manufacturing, construction, and services to be out this week.

The British Pound started the day with a positive tone, with the GBP/USD pair advancing p to 1.4077, although it then retreated to end the day in the 1.4030 region, little changed from Friday's close. There were no news coming from the UK, resulting in the USD leading the way for the pair. Later this week, however, the kingdom will see the release of the Markit PMIs, on manufacturing, services, and construction. Worse-than-expected results will be enough to send the pair below the critical 1.4000 figure. From a technical point of view, the 4 hours chart shows that the pair pulled back to the daily descendant trend line broken last week, meeting selling interest near it and also around a bearish 20 SMA, a sign of bulls being not actually convinced. Technical indicators in the mentioned chart have corrected higher from oversold readings before losing upward strength and turning lower, the Momentum right below its 100 level, but the RSI around 38. An immediate support comes at 1.4010, with a more relevant one at 1.3985, as once below this last, the downward move will likely gain momentum.

Support levels: 1.4010 1.3985 1.3940

Resistance levels: 1.4040 1.4085 1.4125

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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