- A modest USD weakness assisted GBP/USD to gain some positive traction on Tuesday.
- Bulls, however, struggled to capitalize on the move and failed near the 1.3890 region.
- Investors now look forward to the US consumer inflation figures for a fresh impetus.
The GBP/USD pair built on the previous day's goodish rebound from sub-1.3800 levels and gained some follow-through traction through the first half of the trading action on Tuesday.
The US dollar retreated further from two-week tops touched on Monday amid some repositioning trade ahead of the critical US consumer inflation figures. This, in turn, was seen as a key factor that provided a goodish intraday lift to the GBP/USD pair.
That said, expectations for an imminent Fed taper announcement sooner rather than later acted as a tailwind for the greenback. This, along with a goodish pickup in the US Treasury bond yields helped revive the USD demand and capped gains for the GBP/USD pair.
From a technical perspective, the intraday move up once again faltered just ahead of the 1.3900 round-figure mark. This should now act as a key pivotal point for short-term traders as the focus remains on the release of the US consumer inflation figures.
Meanwhile, the recent bounce from the 1.3600 mark has been along an upward sloping channel and points to a well-established short-term uptrend. The constructive outlook is reinforced by the fact that oscillators on the daily chart are holding with a mild positive bias.
However, it will still be prudent to wait for a sustained strength beyond the 1.3890-1.3900 region before positioning for any further appreciating move. The GBP/USD pair might then accelerate the momentum towards mid-1.3900s en-route the key 1.4000 psychological mark.
On the flip side, immediate support is pegged near the 1.3825-20 region ahead of the 1.3800 mark and the lower boundary of the channel. A convincing break through the mentioned support levels would shift the bias in favour of bearish traders and prompt some technical selling.
The GBP/USD pair might then slide to the 1.3730-25 intermediate support before eventually dropping towards the 1.3700 mark. Some follow-through selling has the potential to drag the pair back towards August monthly swing lows, around the 1.3600 round figure.
GBP/USD 4-hour chart
Technical levels to watch
|Today last price||1.3854|
|Today Daily Change||0.0014|
|Today Daily Change %||0.10|
|Today daily open||1.384|
|Previous Daily High||1.3851|
|Previous Daily Low||1.3797|
|Previous Weekly High||1.3889|
|Previous Weekly Low||1.3726|
|Previous Monthly High||1.3958|
|Previous Monthly Low||1.3602|
|Daily Fibonacci 38.2%||1.3831|
|Daily Fibonacci 61.8%||1.3818|
|Daily Pivot Point S1||1.3808|
|Daily Pivot Point S2||1.3776|
|Daily Pivot Point S3||1.3754|
|Daily Pivot Point R1||1.3862|
|Daily Pivot Point R2||1.3884|
|Daily Pivot Point R3||1.3916|
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