- GBP / USD breaks the three-day uptrend as 1.3768 remains a tough nut to crack.
- Stronger returns, the US dollar retreats cable sellers, as Bailey’s comments ignored.
- Will GBP / USD produce a symmetric triangle breakout on the 1D chart?
The GBP/USD has faced rejection once again near the 1.3770 region, with bears now struggling to regain control, dragging rates lower towards 1.3700.
In doing so, the pound turns into the red zone for the first time in four trading sessions, retreating from the four-week highs reached last Friday.
The latest leg to the downside in the pair could be primarily associated with the US dollar rally across the board as Treasury yields extend the rally inspired by the explosion of US retail sales amid surging Fed expectations.
Then there are Brexit concerns, with European Union (EU) states growing weary of the Northern Ireland (IN) Protocol, Brexit, and UK bad faith.
Yield and dollar dynamics will continue to have a significant influence on the looming pound in the absence of relevant UK / US macroeconomic data.
From a short-term technical perspective, the price has stalled to the upside at the resistance of the symmetric triangle at 1.3768.
A daily close above the latter will confirm the upside breakout of the triangle, calling for a new run towards 1.3800. The next bullish target is seen at the downward sloping 100-day moving average (DMA) at 1.3814.
The 14-day Relative Strength Index (RSI) remains above the midline, keeping buyers hopeful.
GBP / USD: Daily chart
Alternatively, the 50 DMA at 1.3716 offers immediate support for the pair, below which a sharp decline towards 1.3625 cannot be ruled out.
That level is the confluence of the 21 DMA and the support of the rising trend line (triangle).
GBP / USD: additional levels to consider