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.

Dhwani Mehta FXStreet

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

GBP/USD

Overview
Today last price	1.4099
Today Daily Change	-0.0005
Today Daily Change %	-0.04
Today daily open	1.4104

Trends
Daily SMA20	1.4157
Daily SMA50	1.4001
Daily SMA100	1.3924
Daily SMA200	1.3572

Levels
Previous Daily High	1.4185
Previous Daily Low	1.4096
Previous Weekly High	1.4191
Previous Weekly Low	1.4073
Previous Monthly High	1.4234
Previous Monthly Low	1.3801
Daily Fibonacci 38.2%	1.413
Daily Fibonacci 61.8%	1.4151
Daily Pivot Point S1	1.4072
Daily Pivot Point S2	1.4039
Daily Pivot Point S3	1.3982
Daily Pivot Point R1	1.4161
Daily Pivot Point R2	1.4218
Daily Pivot Point R3	1.4251

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.

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