Lacks a clear directional bias around 1.3550

• GBP / USD is testing lows after rejection at higher levels.
• The pair remains trapped between two key moving averages on the 4-hour chart.
• The RSI remains flat at the midline, suggesting indecision in the pair.

After failing to break through a strong resistance zone near 1.3580 recently, the GBP / USD has turned down at the start of a new week, now consolidating near the 1.3550 region at the start of the European session on Monday.

Renewed Brexit concerns, fuel supply issues and a broad rally in the US dollar are weighing negatively on GBP / USD as investors focus on the latest news from Evergrande in China.

Light trading conditions appear to have added to the pullback in the pair, while the lack of relevant UK and US economic news will leave pound investors at the mercy of risk sentiment.

From a short-term technical perspective, the price maintains its range between the two key moving averages on the four-hour chart.

The rally is likely to remain below the downslope 50 SMA at 1.3594. Meanwhile, the horizontal 21 SMA at 1.3495 is likely to offer support to the bulls.

The RSI remains flat at the midline, offering no clear sense of direction for investors at the moment.

A sustained move above the range highs is needed to test the resistance of the 50 SMA, above which the psychological level of 1.3650 could come into play.

GBP / USD 4 hour chart

On the other hand, a daily close below the support of the 21 SMA could reinforce bearish interest, exposing the slide towards the ten-month lows of 1.3411.

Before that, the round 1.3500 level could challenge the bulls’ commitment.

GBP / USD additional levels