GBP/USD Price Analysis: Defending critical daily support line ahead of BOE

GBP/USD bounces off key support just above 1.3600.
BOE may hint at tapering, follow Fed’s footsteps.
Will the rebound sustain on the BOE rate decision?

Dhwani Mehta FXStreet

GBP/USD is bouncing off pivotal support just above the 1.3600 level, as the US dollar keeps shedding ground amid an improvement in the risk sentiment.

The bulls are attempting the last dance amid expectations that the Bank of England (BOE) may hint at a potential taper timing, especially after the Fed’s hawkish stance and rising UK inflation expectations. Strengthening the UK labor market also backs the case for the BOE to signal monetary policy normalization.

Heading into the BOE showdown, GBP/USD is attempting a bounce from the horizontal trendline support on the daily chart at 1.3611.

The 14-day Relative Strength Index (RSI) has recovered from lower levels, adding credence to the rebound in the cable. However, the leading indicator stays within the bearish territory, keeping GBP sellers hopeful.

A breach of the abovementioned support could trigger a fresh downswing towards 1.3550, the psychological barrier. The next relevant downside target is seen at 1.3500.

GBP/USD: Daily chart

Alternatively, the GBP bulls need to find acceptance above the range highs around 1.3690 to create any meaningful recovery.

The next bullish target is envisioned at the 1.3750 figure, above which the 21-Daily Moving Average (DMA) at 1.3769 could be put to test.

GBP/USD: Additional levels to consider

GBP/USD

Overview
Today last price	1.3655
Today Daily Change	0.0033
Today Daily Change %	0.24
Today daily open	1.3622

Trends
Daily SMA20	1.3774
Daily SMA50	1.3792
Daily SMA100	1.3905
Daily SMA200	1.384

Levels
Previous Daily High	1.3689
Previous Daily Low	1.361
Previous Weekly High	1.3913
Previous Weekly Low	1.3728
Previous Monthly High	1.3958
Previous Monthly Low	1.3602
Daily Fibonacci 38.2%	1.364
Daily Fibonacci 61.8%	1.3659
Daily Pivot Point S1	1.3591
Daily Pivot Point S2	1.3561
Daily Pivot Point S3	1.3512
Daily Pivot Point R1	1.3671
Daily Pivot Point R2	1.372
Daily Pivot Point R3	1.3751

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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