- GBP / USD turns negative for the first time in four days and is approaching 1.3700.
- GBP bulls give in to bearish crossover and Brexit concerns reappear.
- The 200 day SMA limits gains while the trend line on the daily chart limits losses before key events.
GBP // USD is pulling back towards 1.3700, having once again faced rejection near the 1.3770 region.
The pullback in the pair from six-day highs follows a broad rally in the US dollar, as risky money flows return amid growing concerns about contagion from the Covid Delta variant and ahead of the highly influential Symposium from the Fed’s Jackson Hole. The first day of the Fed’s three-day event begins later this Thursday.
In addition to dollar price action, GBP / USD is also facing renewed post-Brexit jitters, with the UK government supply chain crisis potentially ‘canceling Christmas’ and continuing to cause food shortages until well. entered 2022.
Meanwhile, business leaders are calling for post-Brexit visa rules to be relaxed to avoid the supply chain crisis, due to post-Brexit migration rules. Additionally, fears about the Delta variant of covid continue to lurk around the world, weighing on the market mood and limiting perceived riskier assets such as the British pound.
GBP / USD technical outlook
As seen on the daily chart, the bearish crossover of the 50-day moving average and the 21 SMA has occurred, generating a bearish signal.
The 14-day RSI has turned down below the 50 level, adding credibility to the renewed slide in the currency pair.
Therefore, immediate support is seen at 1.3700, below which the psychological barrier of 1.3650 will be in sight.
Further down, powerful support appears around 1.3610, where the August 23 lows and the rising trend line coincide.
GBP / USD daily chart
On the other hand, acceptance above the recent range highs near 1.3770 could revive the bullish momentum, pointing to a further advance towards the horizontal resistance of the 200 SMA at 1.3796.
The next relevant hurdle is seen at the August 10 low at 1.3827.
GBP / USD additional levels
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