GBP/USD Price Analysis: Remains capped near 1.3875-80 support-turned-resistance

GBP/USD has been struggling to move back above the 1.3875-80 support breakpoint.
The set-up favours bearish traders and supports prospects for additional weakness.

Haresh Menghani FXStreet

The GBP/USD pair failed to capitalize on Friday's goodish rebound from sub-1.3800 levels, or two-and-half-week lows and the upside remained capped near the 1.3875-80 supply zone. This marks a descending triangle support breakpoint.

Apart from this, repeated pullbacks from the vicinity of the 1.4000 psychological mark formed a bearish double-top on the daily chart. The combination of bearish patterns supports prospects for an extension of the recent downward trajectory.

However, the declining trend of new COVID-19 cases in the UK, along with the end of pandemic-related restrictions and the BoE's hints about modest tightening acted as a tailwind for the sterling and helped limit the downside for the GBP/USD pair.

There isn't any major market-moving economic data due for release from the US on Monday. This further makes it prudent to wait for some strong follow-through selling before confirming the bearish outlook and positioning for any further appreciating move.

From current levels, any move beyond the mentioned horizontal support breakpoint might be seen as a selling opportunity near the 1.3900 mark. This should cap any meaningful upside for the GBP/USD pair near the 100-day SMA, around the 1.3910-15 area.

On the flip side, some follow-through selling below the daily swing lows, around the 1.3840-35 region might find some support near the 1.3800-1.3790 region. Some follow-through selling might then drag the GBP/USD pair towards the 1.3730-25 support zone.

GBP/USD 4-hour chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.3865
Today Daily Change	-0.0003
Today Daily Change %	-0.02
Today daily open	1.3868

Trends
Daily SMA20	1.3835
Daily SMA50	1.3889
Daily SMA100	1.3927
Daily SMA200	1.3778

Levels
Previous Daily High	1.3875
Previous Daily Low	1.3791
Previous Weekly High	1.3894
Previous Weekly Low	1.3791
Previous Monthly High	1.3984
Previous Monthly Low	1.3572
Daily Fibonacci 38.2%	1.3843
Daily Fibonacci 61.8%	1.3823
Daily Pivot Point S1	1.3814
Daily Pivot Point S2	1.376
Daily Pivot Point S3	1.373
Daily Pivot Point R1	1.3898
Daily Pivot Point R2	1.3929
Daily Pivot Point R3	1.3983

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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