GBP/USD Forecast: Dips below 1.4100 mark might be seen as a buying opportunity

The GBP/USD pair witnessed some selling for the second consecutive session on Monday and extended the previous session's retracement slide from three-month tops. The intraday decline through the first half of the European session lacked any obvious fundamental catalyst and was solely led by some cross-driven weakness stemming from a modest uptick in the EUR/GBP cross. That said, the prevalent bearish sentiment surrounding the US dollar helped limit any further losses, rather assisted the pair to hold its neck above the 1.4100 round-figure mark, at least for the time being.

The buck struggled to capitalize on Friday's attempted recovery from the lowest level since January amid the ongoing decline in the US Treasury bond yields. The USD bulls failed to gain any respite from speculations that the Fed would taper its emergency stimulus measures sooner rather than later amid signs about a pickup in inflationary pressure. The expectations were reinforced by Friday's PMI reports, which indicated that the business activity in the private sector expanded at a record-setting pace in May and that price pressures continued to increase sharply.

Meanwhile, the underlying bullish sentiment in the global equity markets was seen as another factor that acted as a headwind for the safe-haven greenback. In the absence of any major market-moving economic release, either from the UK or the US, any subsequent fall might still be seen as a buying opportunity. Later during the North American session, a scheduled speech by the Bank of England Governor Andrew Bailey and several FOMC officials, including the Fed Governor Lael Brainard, might assist traders to grab some trading opportunities.

Short-term technical outlook

From a technical perspective, any meaningful decline below the 1.4100 mark is likely to find decent support near the 1.4050 horizontal zone. Some follow-through selling has the potential to drag the pair further towards the key 1.4000 psychological mark. This is closely followed by support marked by the lower boundary of a short-term ascending channel, currently around the 1.3985-80 region, which if broken decisively might turn the pair vulnerable to prolong its corrective slide.

On the flip side, immediate resistance is pegged near the 1.4185 region ahead of the 1.4200 mark. A sustained strength beyond should pave the way for a move beyond YTD tops, around the 1.4235 region, towards challenging the trend-channel resistance, around the 1.4260 region. A convincing breakthrough will be seen as a fresh trigger for bullish traders and allow bulls to aim back to reclaim the 1.4300 mark for the first time since April 2018.