- GBP/USD fails to extend the first daily gains in three.
- Steady RSI, sustained trading below key SMAs keeps sellers hopeful.
- Previous resistance line from July adds strength to immediate support.
GBP/USD drops back to 1.3765 after snapping a two-day downtrend. In doing so, the cable pair fades the previous day’s bounce off the three-month-old resistance-turned-support during the early Asian session on Tuesday.
Given the quote’s inability to cross the 100-DMA and 200-DMA, coupled with the steady RSI, GBP/USD prices are likely to retest the previous resistance line around 1.3740-35. Also adding to the support’s strength is an ascending trend line from September 30.
It should be noted, however, that the pair’s weakness past 1.3735 will make it vulnerable to rest the early October’s top near 1.3675 before highlighting lows marked in August and July, respectively around 1.3600 and 1.3570 for the bears.
Alternatively, the 100-DMA level of 1.3792 precedes the 1.3800 round figure to guard the short-term GBP/USD recovery moves.
Following that, the recent swing high near 1.3835 and 200-DMA level close to 1.3850 will be the key to watch.
Overall, GBP/USD is likely to witness additional downside towards the key support confluence but bears should wait for confirmation.
GBP/USD: Daily chart
Trend: Further weakness expected
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