GBP/USD Price Analysis: Rebound remains capped below 1.3800
- GBP/USD makes an impressive comeback amid broad risk-aversion.
- The cable bulls face stiff resistance at 1.3800, bearish bias remains intact.
- Impending bear cross and RSI sub-50 level keep sellers in control.
GBP/USD is attempting a recovery amid broad risk-aversion, as the pound outperforms across the fx board so far this Thursday.
The rebound in the cable from 1.3760 could be associated with fresh selling seen in the US dollar, as the relentless slide in the Treasury yields drags the greenback lower.
Resurgent covid concerns and its likely hit to the global economic turnaround continue to dampen the investors’ sentiment.
However, the pound emerges the strongest amongst the lot amid Britain’s relative success in vaccinations. The UK boasts of the highest number of doses administered per 100 people across the world.
From a near-term technical perspective, the currency pair’s four-hour chart shows that the price has managed to bounce off ascending trendline support at 1.3761.
However, the recovery appears elusive amid an impending bear cross, with the 21-Simple Moving Average (SMA) on the verge of cutting the 50-SMA from above.
Further, the Relative Strength Index (RSI) remains below the 50 level, despite ticking slightly higher, which keeps the selling interest intact.
If the bears yield a decisive break below the mentioned support, a drop towards 1.3700 cannot be ruled out.
GBP/USD hourly chart
To the upside, the GBP bulls need a four-hourly close above the 1.3824 resistance, the confluence of the 21 and 50-SMAs, in order to negate the near-term bearish momentum.
Buyers would then target the 1.3850 level on their road to recovery.
GBP/USD additional levels to watch
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.
