GBP/USD Price Analysis: Risks a drop to 200-DMA at 1.3770, US inflation eyed

GBP/USD extends a four-day losing streak ahead of the US CPI data.
The cable is challenging 21-DMA support at 1.3831.
Bearish RSI calls for a test of the 200-DMA support.

Dhwani Mehta FXStreet

Following the rejection above 1.3900 last Friday, GBP/USD is extending the bearish momentum into the fourth straight this Wednesday.

At the time of writing, GBP/USD is challenging the 21-Daily Moving Average (DMA), eyeing a sustained move below the latter amid a broadly firmer US dollar amid mixed market mood.

Investors remain cautious and refrain from placing fresh bets in the risk asset, the cable, ahead of the critical US inflation report due for release at 1230 GMT.

The 14-day Relative Strength Index (RSI) is edging modestly lower below the midline, keeping the floors open for the additional downside.

Therefore, the GBP sellers keep their sight on the upward-sloping 200-DMA at 1.3770 should the selling pressure intensify.

Ahead of that level, the 1.3800 round number could test the bearish commitments.

GBP/USD: Daily chart

Alternatively, the cable bulls need to regain ground above 1.3850 to take on Tuesday’s high of 1.3872.

Further up, the spot could face stiff resistance around 1.3895/1.3900, which is the confluence of the August 9 high and psychological level.

GBP/USD: Additional levels to consider

GBP/USD

Overview
Today last price	1.3831
Today Daily Change	-0.0009
Today Daily Change %	-0.07
Today daily open	1.384

Trends
Daily SMA20	1.3831
Daily SMA50	1.3907
Daily SMA100	1.3924
Daily SMA200	1.3767

Levels
Previous Daily High	1.3873
Previous Daily Low	1.3828
Previous Weekly High	1.3958
Previous Weekly Low	1.3861
Previous Monthly High	1.3984
Previous Monthly Low	1.3572
Daily Fibonacci 38.2%	1.3845
Daily Fibonacci 61.8%	1.3855
Daily Pivot Point S1	1.3821
Daily Pivot Point S2	1.3802
Daily Pivot Point S3	1.3776
Daily Pivot Point R1	1.3866
Daily Pivot Point R2	1.3892
Daily Pivot Point R3	1.3911

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.

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