GBP/USD Price Analysis: Weakens further below 1.3900 mark amid broad-based USD strength
- GBP/USD witnessed some heavy selling near the 1.4000 mark amid resurgent USD demand.
- Weakness below the 23.6% Fibo. level has shifted the bias back in favour of bearish traders.
- Any attempted recovery beyond the 1.3900 mark might now be seen as a selling opportunity.
The GBP/USD pair maintained its heavily offered tone through the early North American session and was last seen trading near two-day lows, around the 1.3875-80 region.
A sudden spike in the US Treasury bond yields provided a strong lift to the US dollar and prompted some fresh selling around the GBP/USD pair. Apart from this, Friday's softer UK macro data weighed on the British pound and further contributed to the pair's intraday downfall.
From a technical perspective, this week's goodish positive move from near one-month lows faltered near the key 1.4000 psychological mark. The mentioned level marks the 50% Fibonacci level of the 1.4243-1.3779 downfall and should act as a key pivotal point for short-term traders.
Meanwhile, sustained weakness below the 1.3900 mark and a subsequent breakthrough the 23.6% Fibo. level might have shifted the bias back in favour of bearish traders. However, technical indicators on the daily chart are yet to confirm the negative outlook and warrant some caution.
Hence, any further decline might attract some dip-buying near the 1.3835-30 horizontal zone. Failure to defend the mentioned support will reaffirm the bearish bias and turn the GBP/USD pair vulnerable to break below the 1.3800 mark and retest monthly lows, near the 1.3780-75 region.
On the flip side, attempted recovery moves might now confront resistance near the 1.3900 mark (100/200-hour SMAs confluence). Any further positive move will now be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 1.3930-35 supply zone.
GBP/USD 1-hourly chart
Technical levels to watch