GBP/USD Price Analysis: On the back foot near 1.3900 mark ahead of NFP

GBP/USD witnessed some selling on Friday and eroded a part of the post-BoE gains.
The formation of a descending triangle and double-top pattern favours bearish traders.
Investors seemed reluctant ahead of the US jobs report, warranting caution for bears.

Haresh Menghani FXStreet

The GBP/USD pair edged lower on the last day of the week and was last seen hovering near the lower end of its daily trading range, just above the 1.3900 mark.

From a technical perspective, the overnight post-BoE rebound from the 1.3870 support zone stalled near a one-week-old descending trend-line resistance, forming a descending triangle on hourly charts. Adding to this, the recent failures ahead of the key 1.4000 psychological mark constituted the formation of a double-top on the daily chart.

The combination of bearish patterns suggests that the recent strong rebound from the lowest level since early February has run out of steam. This, in turn, supports prospects for some meaningful corrective slide amid the prevalent US dollar buying interest, supported by Fed Vice Chair Richard Clarida's hawkish comments earlier this week.

Investors, however, seemed reluctant to place any aggressive bets, rather prefer to wait for the release of the closely-watched US monthly jobs report. Hence, it will be prudent to wait for a sustained break below the 1.3870 horizontal support before confirming a bearish breakdown and positioning for any further near-term depreciating move.

The GBP/USD pair might then accelerate the fall to challenge the 100-day SMA support, currently near the 1.3745 region. Some follow-through selling should pave the way for a slide to the 1.3700 mark, which if broken decisively will reaffirm the bearish outlook. The next relevant support is pegged near the 1.3630 region ahead of the 1.3600 mark.

On the flip side, the mentioned descending trend-line, around the 1.3935-40 region, should continue to cap the immediate upside. A sustained strength beyond, leading to some follow-through move above July swing highs, around the 1.3980-85 region, will negate the near-term bearish bias and prompt some aggressive short-covering move.

The GBP/USD pair might then aim to surpass the 1.4050-55 intermediate resistance and climb further towards reclaiming the 1.4100 mark for the first time since June 16.

GBP/USD 4-hour chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.3914
Today Daily Change	-0.0016
Today Daily Change %	-0.11
Today daily open	1.393

Trends
Daily SMA20	1.3833
Daily SMA50	1.3927
Daily SMA100	1.3923
Daily SMA200	1.3754

Levels
Previous Daily High	1.3949
Previous Daily Low	1.3873
Previous Weekly High	1.3984
Previous Weekly Low	1.3737
Previous Monthly High	1.3984
Previous Monthly Low	1.3572
Daily Fibonacci 38.2%	1.392
Daily Fibonacci 61.8%	1.3902
Daily Pivot Point S1	1.3885
Daily Pivot Point S2	1.3841
Daily Pivot Point S3	1.3809
Daily Pivot Point R1	1.3962
Daily Pivot Point R2	1.3994
Daily Pivot Point R3	1.4038

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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