GBP/USD Price Analysis: Eyes acceptance above 1.3570 to unleash additional recovery
- GBP/USD rebounds firmly from two-month lows, recaptures 1.3550.
- Brexit woes amid looming Article 16 trigger pose risks to the cable’s recovery.
- Bearish daily RSI keeps the sellers hopeful, as 1.3570 offers stiff resistance.
GBP/USD is consolidating the recent recovery rally from two-month lows of 1.3424, as buyers continue to challenge sellers’ commitments amid persistent Brexit concerns.
A lack of progress on the Brexit front combined with the impending threat of the UK triggering Article 16 keeps the pound bulls at bay.
However, a broadly weaker US dollar, despite a cautious market mood, could likely offset the Brexit risks, boding well for the cable. The focus now shifts towards the speeches from Fed Chair Jerome Powell and BOE Governor Andrew Bailey for fresh hints on the monetary policy.
Looking at GBP/USD’s daily chart, the bears are fighting for control, as bulls appear to find stiff resistance at the horizontal trendline hurdle around the 1.3568-1.3570 region.
If the buyers manage to gain the upper hand, then the spot could head higher to test November 2 lows of 1.3605.
Further up, the 1.3650 psychological level will be next on the bulls’ minds.
GBP/USD: Daily chart
The 14-day Relative Strength Index (RSI), however, continues to trade below the midline, questioning the recovery momentum in the cable.
Selling resurgence could call for a test of the 1.3500 level, below which Monday’s low of 1.3450 could be challenged.
The last line of defense for GBP bulls is 1.3428, which appears at the rising trendline support.
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.
