Economy Forex News

GBP/USD: Still not out of the woods, break below 1.3400

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  • Moderate USD demand helps GBP/USD gain some positive traction on Thursday.
  • Lack of follow-through buying suggests that the recent slide is far from over.
  • The pair still looks vulnerable to break below the 1.3400 level and test 1.3350.

GBP/USD is moving higher on Thursday, although it is struggling to capitalize on the recovery attempt beyond the 1.3450 region. The pair moves with modest intraday gains and remains near the yearly lows touched in the previous day.

GBP/USD

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In recent weeks, the US dollar has strengthened to the highest level since September 2020. The upward revision to UK GDP growth for the second quarter has bolstered sterling and provided a modest boost to the GBP/USD pair.

USD has, however, continued to benefit from expectations of a tightening of monetary policy by the Fed. Aside from this, the ongoing fuel crisis in the UK has further limited any meaningful upside for the GBP/USD pair, at least for now.

Technically, the sustained break below the strong horizontal support at 1.3600 was seen as a key bearish trigger this week. In the meantime, slightly oversold conditions on the short-term charts have prevented investors from opening new bearish positions around the GBP/USD pair.

However, the bias remains firmly tilted in favor of the bearish. It supports the prospects of an extension of the recent move lower.

The GBP/USD pair looks vulnerable to breaking below the 1.3400 round level and testing the next relevant support near 1.3350.

In contrast, any significant recovery will likely face stiff resistance near the psychological level of 1.3500. A sustained move above this region could trigger a short-covering move, though any subsequent move higher is more likely to remain limited near the support breakout point at 1.3600.

GBP/USD technical levels

OVERVIEW
Today’s Last Price 1.3449
Daily Rate % 0.16
Open 1.3428

TRENDS
20 Daily SMA 1.3741
50 Daily SMA 1.3781
100 Daily SMA 1.3884
SMA of 200 Daily 1.3844

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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