- GBP / USD halts its four-day recovery move from ten-month lows.
- GBP / USD is testing 1.3600 after a U-turn from near 1.3650.
- The RSI turns lower below the midline, allowing room for further declines.
After ending a four-day winning streak on Wednesday, the GBP / USD pair is licking its wounds while below the 1.3600 level and as the bulls await a strong catalyst to initiate a significant recovery.
GBP / USD remains torn between waning energy crisis concerns and looming Brexit concerns. France remains at odds with the UK over the ongoing controversy over fishing rights in the post-Brexit transition.
However, a broadly dovish US dollar, amid optimism about the progress of the debt ceiling, maintains the supported decline in GBP / USD. All eyes are now on the vote to widen the US debt ceiling scheduled for Thursday for a new trade boost.
Technically, the price maintains the uptrend line support at 1.3569 on the 4-hour chart. At that time, the downward sloping 50-period simple moving average coincides in this region.
Defending that support is critical for GBP bulls, as a break to the downside would fuel a sharp slide towards Oct 1 lows of 1.3434.
Before that, GBP / USD sellers will challenge the round 1.3500 level.
GBP / USD daily chart
However, with the RSI trending above the midline, GBP buyers remain hopeful.
A bounce off the aforementioned critical support could point to a test of the 21 SMA at 1.3594, above which a strong advance towards the bearishly sloping 100 SMA at 1.3642 would be on the table.
GBP / USD additional levels
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