- A modest USD profit-taking assisted GBP/USD to rebound from multi-week lows.
- The near-term technical set-up remains tilted firmly in favour of bearish traders.
- The 1.3800 mark is likely to cap any further recovery beyond the 1.3760-50 area.
The GBP/USD pair remained depressed through the first half of the European session, albeit has managed to recover over 50 pips from multi-week lows touched earlier this Wednesday. The pair was last seen trading around the 1.3730 region, down 0.15% for the day.
A goodish rebound in the US equity futures led to some profit-taking around the safe-haven US dollar. This, along with mostly upbeat UK PMI prints for March, extended some support and assisted the GBP/USD pair to attract some buying near the 1.3675-70 region.
From a technical perspective, the GBP/USD pair on Tuesday confirmed a bearish breakdown through the 1.3800 mark. A subsequent slide below the 1.3760-50 region prompted some follow-through technical selling and paved the way for additional weakness.
That said, oversold RSI (14) on hourly charts held traders from placing fresh bearish bets and prompted some intraday short-covering move. However, bearish oscillators on the daily chart support prospects for an extension of the recent downward trajectory.
Hence, any further recovery towards the 1.3760-50 support breakpoint might still be seen as a selling opportunity. This, in turn, should keep a lid on any further gains for the GBP/USD pair near the 1.3800 mark amid the upbeat US economic outlook.
On the flip side, renewed weakness below the 1.3700 mark now seems to find some support near the daily swing lows, around the 1.3675-70 region. Some follow-through selling has the potential to drag the GBP/USD pair further towards the 100-day SMA support near the 1.3600 mark.
GBP/USD daily chart
Technical levels to watch
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