- The pound fails to stay above 1.4 against the dollar and corrects lower.
- The dollar regains a small part of the lost ground.
GBP / USD came in the European session up to 1.4008, the highest level in a month, but then undertook a downward correction. The pullback extended to the 1.3950 area. It is trading 1.3955, giving up less than 30 pips so far this day, and holding on to most of Monday’s gains.
A recovery in the dollar was among the reasons for the decline in GBP / USD. The dollar index recovered from lows and remains around 91.00. The greenback was helped by a rebound in Treasury bond yields, and a drop in stocks.
Technical overview
The hour graph showed the GBP / USD with indicators such as RSI overbought, while longer-term charts, such as the day, still support a bullish continuity scenario. The latter faces strong resistance at the 1.4000 area, which if broken would definitely leave the pound ready to extend the raises.
The next resistance above 1.4000 can be found at the horizontal zone of 1.4055 / 60, which protects the next major barrier at 1.4100.
In the opposite direction, support below 1.3940 / 50 can be located in the 1.3900 area. This is followed by the level of the recent break at the downtrend line, around 1.3850.
GBP / USD day chart
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