- 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.
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
Today’s Last Price 1.3449
Daily Rate % 0.16
20 Daily SMA 1.3741
50 Daily SMA 1.3781
100 Daily SMA 1.3884
SMA of 200 Daily 1.3844