GBP/USD Price Analysis: Bulls trying to defend ascending channel support near mid-1.3700s

GBP/USD stalled the previous day’s retracement slide near ascending channel support.
A sustained breakthrough is needed to support prospects for a further near-term decline.

Haresh Menghani FXStreet

The GBP/USD pair witnessed an intraday turnaround from a short-term descending trend-line extending from late July and retreated over 70 pips from the 1.3825-30 resistance zone on Tuesday. The pullback, however, lacked strong follow-through selling and the pair, so far, has managed to defend support marked by the lower boundary of an upward sloping channel.

The dominant risk-on mood failed to assist the safe-haven US dollar to capitalize on the previous day's upbeat US data-inspired gains, instead led to a subdued/range-bound price action on Wednesday. This, in turn, extended some support to the GBP/USD pair amid rising bets for an imminent Bank of England rate hike move later this year.

That said, tensions between the UK and France over fishing rights, along with a fresh row over the Northern Ireland protocol acted as a headwind for the British pound. Investors also seemed reluctant to place any aggressive bets around the GBP/USD pair ahead of the annual budget announcement by the UK Finance Minister Rishi Sunak.

Meanwhile, technical indicators on the daily chart – though have been losing positive traction – are still holding in the bullish territory. This further makes it prudent to wait for a sustained break below the trend-channel support before confirming that the recent positive move has run out of steam and placing fresh bearish bets.

The GBP/USD pair might then accelerate the corrective slide to the 1.3725 intermediate support en-route the 1.3700 mark and the next relevant support near mid-1.3600s. Some follow-through selling will set the stage for fall towards testing sub-1.3600 levels ahead of the BoE and FOMC monetary policy meetings next week.

On the flip side, the 1.3790-1.3800 region now seems to act as immediate resistance for the GBP/USD pair ahead of the descending trend-line, around the 1.3825-30 supply zone. This is closely followed by the very important 200-day SMA, around mid-1.3800s, which if cleared will be seen as a fresh trigger for bullish traders.

GBP/USD daily chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.3768
Today Daily Change	0.0004
Today Daily Change %	0.03
Today daily open	1.3764

Trends
Daily SMA20	1.366
Daily SMA50	1.3711
Daily SMA100	1.3792
Daily SMA200	1.3851

Levels
Previous Daily High	1.3829
Previous Daily Low	1.3757
Previous Weekly High	1.3834
Previous Weekly Low	1.3709
Previous Monthly High	1.3913
Previous Monthly Low	1.3412
Daily Fibonacci 38.2%	1.3785
Daily Fibonacci 61.8%	1.3802
Daily Pivot Point S1	1.3738
Daily Pivot Point S2	1.3711
Daily Pivot Point S3	1.3666
Daily Pivot Point R1	1.381
Daily Pivot Point R2	1.3856
Daily Pivot Point R3	1.3883

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD weakens toward 1.1600 as firm US data revives the US Dollar

The EUR/USD edged lower on Thursday, down some 0.21% as market sentiment remains risk averse due to the ongoing conflict in the Middle East. This and solid US economic data pushed the pair lower towards the 1.1600 figure ahead of Friday’s session.

GBP/USD stays offered near 1.3340

GBP/USD fades Wednesday’s uptick and trades with decent losses in the 1.3340 zone in the latter part of Thursday’s session. Cable’s weakness, alongside the rest of the risk complex, follows the strong performance of the Greenback amid intense geopolitical jitters.

Gold: further weakness could challenge $5,000

Gold comes under fresh selling pressure on Thursday, slipping back below the $5,100 mark per troy ounce. Persistent strength in the US Dollar (USD) is preventing the yellow metal from building a meaningful recovery, even as markets remain risk-averse amid the deepening conflict in the Middle East.

NYSE parent Intercontinental Exchange partners with OKX, invests at a $25B valuation

OKX announced an investment from Intercontinental Exchange, raising its valuation to $25 billion, alongside a partnership to expand regulated crypto futures and tokenized equity offerings globally.

Two PMIs, two Chinas

China’s economic data are often treated with a degree of caution by global investors. The challenge is not necessarily that the numbers are incorrect, but that they can describe very different parts of a vast and complex economy. Nowhere is that more evident than in China’s PMIs.

Ripple tests recovery strength amid steady ETF inflows, growing retail interest

Ripple (XRP) continues to demonstrate notable resilience as the cryptocurrency market navigates the persistent war in the Middle East after the United States (US) and Israel attacked Iran on Saturday.