GBP/USD Price Analysis: Licks wounds below 1.3500, 50-DMA support eyed
- GBP/USD nurses losses amid a four-day downtrend, risk-aversion.
- 50-DMA support at 1.3421 remains in sight if bears extend their control.
- Bearish RSI points to additional downside, focus remains on the Fed.
GBP/USD is licking its wounds below 1.3500, as bears take a breather after the recent downward spiral to three-week lows of 1.3440.
Looming UK political concerns combined with intensifying risk-off mood hit the high-beta currency, the GBP, keeping the bearish tone intact around the cable.
NATO readying their forces in Eastern Europe, as the geopolitical tensions between Russia and Ukraine escalate, spooked markets and bolstered the safe-haven demand for the US dollar.
Further, the greenback also benefited from aggressive Fed rate hike expectations, as the world’s most powerful central bank is set to hint at policy normalization on Wednesday when it concludes its two-day meeting.
In the meantime, the broader market sentiment, Russia-Ukraine updates and the UK political developments will continue to influence the major.
Looking at GBP/USD’s daily chart, the pair remains exposed to downside risks, with a sustained break below Monday’s low of 1.3440 to unleash the additional declines towards the horizontal 100-Daily Moving Average (DMA) at 1.3421.
The 14-day Relative Strength Index (RSI) is inching lower below the midline, suggesting that there is more room to fall for the currency pair.
The next significant support is seen at the round level of 1.3400.
GBP/USD: Daily chart
Alternatively, acceptance above mildly bearish 50-DMA at 1.3536 on a daily closing basis is critical to attempting any recovery from multi-week lows.
The 21-DMA at 1.3565 will then challenge the road to recovery, as bulls look to recapture the 1.3600 hurdle.
GBP/USD: Additional technical levels
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.
