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  • GBP/USD price attempts to gain but falters by 1.3700 stiff resistance.
  • The Evergrande concerns lend support to the safe have US dollar.
  • Market participants await FOMC and BoE meetings to find directional bias for the Sterling.

The GBP/USD price hit a new high around 1.3690 in the European session. However, the pair is struggling to gain further during the New York session.

The GBP/USD pair is at 1.3664, up 0.13% on Tuesday at the time of writing.

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During the first half of Tuesday’s trading, the pair could halt part of its decline to 4-week lows. The rally ended a three-day losing streak for the GBP/USD pair and fueled extremely moderate US dollar weakness.

Safe-haven demand may have declined due to risk dynamics, as evident by the strong recovery of equity markets. However, the possibility of a China Evergrande default may dampen market expectations for a Fed tapering shortly.

The Fed is increasingly expected to start withdrawing its massive stimulus package started during the pandemic sooner or later. This will provide tailwinds for the US dollar and cap the gains in the GBP/USD, so bulls need to be wary.

No major economic data will be released in the UK in the coming days, so price dynamics in US dollars will continue to dominate the GBP/USD dynamics. Therefore, before positioning for further gains, it is also advisable to wait for a few subsequent buys above 1.3700.

Investors continue to focus on the outcome of the FOMC’s two-day monetary policy meeting to learn about the Fed’s asset purchase tapering plan.

On Thursday, investors will also be interested in the latest policy update from the Bank of England. Several major announcements from the central bank will determine the direction of the GBP/USD pair.

GBP/USD price technical analysis: 1.3700 to block the bulls

GBP/USD 4-hour price chart
GBP/USD 4-hour price chart

The GBP/USD price attempts to rise towards the 1.3700 area but finds strong rejection, shedding off most gains. However, the volume rises with the price rise, while the decline comes with a declining volume. It indicates that the price is willing to gain provided the market catalyst keep favoring the Sterling bulls.

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The average daily range for the pair is 62% so far, which is quite low as we have already been in the New York session. It indicates that the market participants are eagerly waiting for FOMC. The price is well below the 20-period SMA on the 4-hour chart. The bias remains bearish as long as the price stays below the 1.3700 and 1.3724 (20-period SMA) support zone. On the downside, the price may test the 4-week lows at 1.3640 ahead of 1.3600.

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