- GBP / USD struggles to find firm direction and remains trapped within a range on Monday.
- Repeated failures around 1.4000 favor the bears, while the emergence of lower buying warrants caution.
- Neutral oscillators make it prudent to expect sustained movement in either direction.
GBP / USD is balancing between tepid gains and minor losses during Monday’s European session, staying in neutral territory around the 1.3920-25 region.
Repeated failures near the key psychological 1.4000 level, which coincides with the 50% Fibonacci retracement of the corrective decline from 1.4243 to 1.3779, constitutes the formation of multiple bearish highs. That being said, the GBP / USD pair, so far, has shown some resistance below the round 1.3900 level, or at the 200 hourly SMA.
This level is closely followed by the 1.3980-85 confluence region, where an uptrend line of more than a week and the 23.6% Fibonacci retracement of the corrective dip from 1.4243 to 1.3779 are found. The bears are likely to wait for a convincing breakout of the mentioned support before positioning themselves for a further decline.
Meanwhile, the neutral technical indicators on the 4-hour and daily charts have not supported any firm direction. Investors now appear reluctant to open aggressive positions, preferring to wait on the sidelines before the FOMC’s monetary policy decision on Wednesday and the Bank of England meeting on Thursday.
Meanwhile, sustained weakness below the aforementioned confluence support will be seen as a further trigger for bears. This could make the pair vulnerable to accelerate the slide towards the intermediate support test at 1.3830-25, en route to monthly lows around the 1.3780 region.
On the other hand, immediate resistance is near the 1.3955-60 region (38.2% Fibonacci retracement), which if it breaks decisively could push the GBP / USD pair towards the round level of 1.4000. Some subsequent purchases should pave the way for a move towards the 1.4070 area (61.8% Fibonacci retracement) ahead of the 1.4100 level.
GBP / USD 1 hour chart
GBP / USD technical levels
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