GBP/USD Price Analysis: Bulls challenging critical support line near 1.3560
- GBP/USD stalls its four-day recovery rally from ten-month lows.
- The cable is testing 1.3600 following a U-turn from near 1.3650.
- RSI has turned lower below the midline, allowing room for more declines.
Having ended a four-day winning streak on Wednesday, GBP/USD is licking its wounds while below 1.3600, as the bulls await a strong catalyst to initiate a meaningful recovery.
The cable remains divided between easing energy crunch and looming Brexit concerns. France remains at warheads with the UK over the ongoing row about fishing rights in the post-Brexit transition.
However, a broadly subdued US dollar amid the optimism on the debt ceiling progress, keeps the downside cushioned in GBP/USD. All eyes now remain on the US debt ceiling extension vote due later this Thursday for fresh trading impetus.
Technically, the price is holding onto the rising trendline support at 1.3569 on the four-hour chart. At that point, the descending 50-Simple Moving Average (SMA) coincides.
Defending that support is critical for the GBP bulls, as a downside break would fuel a sharp drop towards the October 1 lows of 1.3434.
Ahead of that the cable sellers will challenge the 1.3500 round figure.
GBP/USD: Daily chart
However, with the Relative Strength Index (RSI) trending above the midline, GBP buyers remain hopeful.
A rebound from the abovementioned critical support could call for a test of the 21-SMA at 1.3594, above which a sharp advance towards the bearish 100-SMA at 1.3642 would be very well on the cards.
GBP/USD: Additional levels to consider
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.
