GBP/USD Price Analysis: Remains vulnerable to slide further

A modest USD profit-taking assisted GBP/USD to reverse an intraday dip to sub-1.3600 levels.
Acceptance below 200-day SMA might have already set the stage for a further near-term decline.
Any attempted recovery move is more likely to remain capped near the 1.3700 round-figure mark.

Haresh Menghani FXStreet

The GBP/USD pair once again showed some resilience below the 1.3600 mark and quickly recovered around 40-50 pips from the daily swing lows. The pair climbed back closer to the top end of its daily trading range, though lacked any follow-through buying and was last seen hovering around the 1.3630 region.

A generally positive risk tone – as depicted by a strong follow-through rally in the equity markets – prompted some profit-taking around the safe-haven US dollar. This, in turn, was seen as a key factor that extended some support to the GBP/USD pair. That said, the impasse over the Northern Ireland Protocol of the Brexit deal, along with the resurgence of the COVID-19 infections in the UK acted as a headwind for the British pound and capped gains.

From a technical perspective, the GBP/USD pair has found acceptance below the very important 200-day SMA for the first time since July 2020 and seems vulnerable to slide further. The pair, however, managed to find some support just ahead of February 2021 on Tuesday. This, coupled with the fact that RSI (14) on the daily chart has moved on the verge of breaking into the oversold territory, warrants some caution for aggressive bearish traders.

Hence, it will be prudent to wait for some consolidation or a modest bounce before positioning for any further depreciating move. In the meantime, any attempted recovery move might be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 1.3700 mark. This coincides with the 200-DMA support breakpoint and should now act as a key pivotal point and help determine the next leg of a directional move for the GBP/USD pair.

On the flip side, the 1.3570-60 region seems to have emerged as immediate support. A convincing break below will be seen as a fresh trigger for bearish traders and prompt some technical selling. The GBP/USD pair might then accelerate the fall further towards the key 1.3500 psychological mark. The downward trajectory could further get extended towards the next relevant support near the 1.3450-30 horizontal zone.

GBP/USD daily chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.3625
Today Daily Change	-0.0003
Today Daily Change %	-0.02
Today daily open	1.3628

Trends
Daily SMA20	1.3825
Daily SMA50	1.3993
Daily SMA100	1.3929
Daily SMA200	1.3702

Levels
Previous Daily High	1.369
Previous Daily Low	1.3572
Previous Weekly High	1.391
Previous Weekly Low	1.3761
Previous Monthly High	1.4249
Previous Monthly Low	1.3787
Daily Fibonacci 38.2%	1.3617
Daily Fibonacci 61.8%	1.3645
Daily Pivot Point S1	1.357
Daily Pivot Point S2	1.3512
Daily Pivot Point S3	1.3452
Daily Pivot Point R1	1.3688
Daily Pivot Point R2	1.3748
Daily Pivot Point R3	1.3806

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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