GBP/USD Price Analysis: Rejection at 1.3650 recalls the sellers
- GBP/USD stalls its four-day recovery rally from ten-month lows.
- The cable is testing 1.3600 following a U-turn from near 1.3650.
- RSI has turned lower below the midline, allowing room for more declines.
Sellers seem to have returned this Wednesday, knocking off GBP/USD back into the red zone after four straight days of gains.
Fuel shortage problems and renewed Brexit concerns continue to weigh on the pound while the cable currently remains undermined by the broad-based US dollar strength. The safe-haven dollar benefits from the risk-off mood, courtesy of the advance in the Treasury yields on rising energy costs and Fed’s tapering expectations.
The focus now remains on the US ADP jobs data for fresh dollar trades, as the UK data docket remains relatively scarce.
From a near-term technical perspective, the price is testing bids near 1.3600, having faced rejection just below the 1.3650 psychological level.
Acceptance above the latter would prompt the bulls to take on the bearish 21-Daily Moving Average (DMA) at 1.3683, above which the 1.3700 round number could come into play.
The 14-day Relative Strength Index (RSI) is edging lower below the midline, backing the renewed downside in the spot.
Meanwhile, the 100-DMA is on the verge of cutting the 200-DMA from above, which if materialized would confirm a bear cross and add credence to the negative bias.
GBP/USD: Daily chart
Alternatively, the immediate decline could find support at Tuesday’s low of 1.3584, below which a drop towards the 1.3500 level cannot be ruled out.
The multi-month lows of 1.3411 could be next on the sellers’ radars.
GBP/USD: Additional levels to consider