- GBP/USD met with some fresh supply on Thursday and turned lower for the third straight session.
- Technical indicators are yet to confirm a bearish bias and warrants some caution aggressive traders.
- A sustained move back above the 1.3950 strong resistance will negate any near-term bearish bias.
The GBP/USD pair struggled to capitalize on its early positive move, instead met with some fresh supply near mid-1.3900s and turned lower for the third consecutive session. The intraday downfall dragged the pair back below the 1.3900 mark, closer to the overnight swing lows during the first half of the European session.
Renewed fears about another dangerous wave of coronavirus infections in some countries continued weighing on investors' sentiment. Apart from this, a goodish intraday bounce in the US Treasury bond yields provided a modest lift to the US dollar, which, in turn, was seen as a key factor exerting pressure on the GBP/USD pair.
Looking at the technical picture, weakness below 100-hour SMA might be seen as a fresh trigger for intraday bearish traders. That said, the GBP/USD pair once again managed to find some support near the 1.3885-80 region, just ahead of the 38.2% Fibonacci level of the 1.3669-1.4009 move up, which should now act as a key pivotal point.
Meanwhile, technical indicators on 4-hour/daily charts maintained their bullish bias and have moved on the verge of breaking into the oversold territory on the 1-hour chart. This warrants some caution for bearish traders and makes it prudent to wait for sustained weakness below the mentioned support before positioning for any further decline.
The next relevant target on the downside is pegged near the 50% Fibo. level, around the 1.3840 region. Bears could eventually aim to test the 1.3800 mark, or the 61.8% Fibo. level support, which if broken decisively will negate any near-term positive bias and pave the way for an extension of this week's slide from the key 1.4000 psychological mark.
On the flip side, the 1.3950 region now seems to have emerged as immediate strong resistance. A convincing breakthrough might trigger a short-covering move towards the 1.4000 mark. Some follow-through buying has the potential to push the GBP/USD pair towards the 1.4055-60 intermediate hurdle en-route the 1.4100 level.
GBP/USD 1-hour chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.