GBP/USD Price Analysis: Bears challenge critical 21-DMA support

GBP/USD sellers look for entry below critical 21-DMA.
Tuesday’s Doji suggests the bears could be losing conviction.
Focus shifts to UK and US economic data.

Dhwani Mehta FXStreet

GBP/USD is on the back foot around 1.3650 heading into the London open. The downside appears cushioned for Cable, thanks to the upbeat market mood and a broadly weaker US dollar.

Markets look forward to the UK Final Services PMI, US ADP jobs and ISM Services PMI data for fresh trading impetus. Also, in focus remains the developments around the Brexit issues and US stimulus talks.

Looking from a technical perspective, the bulls have managed to defend the critical 21-daily moving average (DMA), now at 1.3648, so far this Wednesday. The price breached the latter on Tuesday but recaptured it towards the closing.

Meanwhile, the Doji candlesticks formed on the daily chart a day before could be hinting towards sellers’ exhaustion, especially after a three-day bearish run.

Therefore, the GBP buyers remain hopeful so long as the price holds above the 21-DMA. The major could likely retest Tuesday’s high at 1.3710.

The Relative Strength Index (RSI) trades flat above the midline, near 52.10, which could offer some support to the bulls.

However, a daily closing below the 21-DMA could trigger a sharp sell-off towards the upward-sloping 50-DMA support at 1.3535. Note that the price hasn’t given a daily closing below the 21-DMA since January 11.

GBP/USD: Daily chart

GBP/USD: Additional levels

GBP/USD

Overview
Today last price	1.3652
Today Daily Change	-0.0007
Today Daily Change %	-0.05
Today daily open	1.366

Trends
Daily SMA20	1.3649
Daily SMA50	1.353
Daily SMA100	1.3274
Daily SMA200	1.2988

Levels
Previous Daily High	1.371
Previous Daily Low	1.3611
Previous Weekly High	1.3759
Previous Weekly Low	1.361
Previous Monthly High	1.3759
Previous Monthly Low	1.3451
Daily Fibonacci 38.2%	1.3649
Daily Fibonacci 61.8%	1.3672
Daily Pivot Point S1	1.3611
Daily Pivot Point S2	1.3562
Daily Pivot Point S3	1.3512
Daily Pivot Point R1	1.371
Daily Pivot Point R2	1.376
Daily Pivot Point R3	1.3809

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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