GBP/USD Price Analysis: Extends corrective slide from 34-month tops, further below 1.3900 mark

A sudden pickup in the USD demand prompted some profit-taking around GBP/USD.
Break below 1.3860-55 confluence support might pave the way for further downside.
Mixed technical indicators warrant some caution before placing any aggressive bets.

Haresh Menghani FXStreet

The GBP/USD pair witnessed an intraday turnaround from 34-month tops and slipped below the 1.3900 round-figure mark during the early North American session.

The US dollar staged a solid rebound from three-week lows amid some strong follow-through upsurge in the US Treasury bond yields. This, in turn, was seen as a key factor that prompted some profit-taking around the GBP/USD pair.

Despite the intraday pullback of around 75 pips, the GBP/USD pair, so far, has managed to hold above the 1.3860-55 confluence support. The mentioned region comprises of 100-hour SMA and ascending trend-line, extending from monthly lows.

Meanwhile, technical indicators on the 1-hourly chart have been gaining bearish traction. However, oscillators on 4-hourly/daily charts are still holding comfortably in the positive territory and warrant caution for bearish traders.

Hence, it will be prudent to wait for a convincing break through the 1.3860-55 confluence support before confirming that the GBP/USD pair might have topped out in the near-term. This, in turn, will set the stage for additional weakness.

The GBP/USD pair might then turn vulnerable to accelerate the corrective slide towards the 1.3800 mark. Any further decline might still be seen as a buying opportunity and remain limited near the 1.3760-55 congestion zone.

On the flip side, the 1.3950 region, or near three-year tops set earlier this Tuesday, now becomes immediate resistance. A sustained strength beyond has the potential to lift the GBP/USD pair towards the key 1.4000 psychological mark.

GBP/USD 1-hourly chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.3886
Today Daily Change	-0.0020
Today Daily Change %	-0.14
Today daily open	1.3906

Trends
Daily SMA20	1.3729
Daily SMA50	1.3602
Daily SMA100	1.336
Daily SMA200	1.3049

Levels
Previous Daily High	1.3919
Previous Daily Low	1.3834
Previous Weekly High	1.3866
Previous Weekly Low	1.368
Previous Monthly High	1.3759
Previous Monthly Low	1.3451
Daily Fibonacci 38.2%	1.3887
Daily Fibonacci 61.8%	1.3867
Daily Pivot Point S1	1.3854
Daily Pivot Point S2	1.3802
Daily Pivot Point S3	1.3769
Daily Pivot Point R1	1.3939
Daily Pivot Point R2	1.3971
Daily Pivot Point R3	1.4023

Author

Haresh Menghani

FXStreet

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

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