- GBP / USD is bouncing but still not out of the woods amid looming Brexit concerns.
- The pair confirms the breaking of a rising wedge on the daily chart.
- It points to deeper losses, as the USD clings to recent gains before the Fed.
GBP / USD is looking for a sustained break below the 1.4100 level, as bears remain in control amid a vastly stronger US dollar and a revival of Brexit concerns.
European Union (EU) officials remain concerned about the Brexit showdown, this time over the Northern Ireland protocol issue, while warning British Prime Minister Boris Johnson of the UK’s reputation.
Meanwhile, a delay in reopening the UK, amid the growing delta strain of covid, also weighs on the British pound, while the US dollar remains firm ahead of this week’s FOMC decision.
From a short-term technical perspective, GBP / USD confirmed the breaking of a rising wedge on Friday after it closed for the day below the uptrend line support at 1.4116.
Therefore, the decline is still pointing towards the 50-day moving average, now at 1.4005.
Before that level, the June 10 low of 1.4073 could test bears’ commitment.
The RSI has recaptured the midline, although it appears to lack continuation recovery, suggesting a shallow rebound.
On the other hand, the bulls need acceptance above the support of the pattern, now turned into resistance at 1.4116, in order to extend the recovery momentum.
Higher up, the 21-day SMA at 1.4155 will likely limit further advances.
GBP / USD Daily Chart
GBP / USD technical levels
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