- GBP / USD rebounds firmly from two-month lows and recovers 1.3550.
- Brexit issues amid the impending Article 16 enforcement pose risks to the GBP / USD rally.
- Bearish daily RSI keeps sellers hopeful, while 1.3570 offers stiff resistance.
GBP / USD is consolidating the recent recovery rally from two-month lows of 1.3424, as buyers continue to challenge sellers’ engagement amid lingering Brexit concerns.
The lack of progress on the Brexit front, combined with the looming threat of the UK activating Article 16, limits sterling bulls.
However, a broadly weaker US dollar, despite cautious market sentiment, could likely offset Brexit risks, helping the pair rally. The spotlight is now on speeches by Fed Chairman Jerome Powell and BoE Governor Andrew Bailey for new clues on monetary policy.
Looking at the GBP / USD daily chart, the bears are having a hard time maintaining control, while the bulls appear to find stiff resistance at the horizontal hurdle around the 1.3568-1.3570 region.
If buyers manage to break out of this region, then the pair could rise to test the November 2 lows of 1.3605.
Higher up, the 1.3650 psychological level will be next on the bulls’ minds.
GBP / USD daily chart
However, the 14-day RSI continues to move below the midline, questioning the recovery momentum in the pair.
The resurgence in selling could lead to a test of the 1.3500 level, below which Monday’s low of 1.3450 could be challenged.
The last line of defense for the GBP / USD bulls is 1.3428, which is the support of the rising trend line.
GBP / USD additional levels
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