GBP/USD Price Analysis: A drop towards 1.4000 remains in the offing
- GBP/USD bounces but not out of the woods yet amid looming Brexit concerns.
- The cable confirms a rising wedge breakdown on the daily chart.
- Eyes deeper losses, as the US dollar clings to recent gains ahead of Fed.
GBP/USD is eyeing a sustained break below the 1.4100 level, as the bears remain in charge amid a broadly stronger US dollar and resurfacing Brexit concerns.
The European Union (EU) officials remain concerned about the Brexit stand-off, this time over Northern Ireland’s (NI) protocol issue, as they warn the UK PM Boris Johnson of the Kingdom’s reputation.
Meanwhile, a delay in the UK reopening amid the growing Indian delta covid strain also adds to the weight on the pound while the US dollar remains hopeful ahead of this week’s FOMC decision.
From a near-term technical perspective, the spot confirmed a rising wedge breakdown on Friday after It closed the day below the ascending trendline support at 1.4116.
Therefore, the downside remains exposed towards the 50-Daily Moving Average (DMA), now at 1.4005.
Ahead of that the June 10 low of 1.4073 could test the bearish commitments.
The Relative Strength Index (RSI) has recaptured the midline, although appears to lack follow-through recovery, suggesting a shallow bounce.
GBP/USD daily chart
On the flip side, the bulls need acceptance above the patten support now resistance at 1.4116, in order to extend the recovery momentum.
Further up, the 21-DMA at 1.4155 will likely guard the additional advances.
GBP/USD additional levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
