- GBP/USD inched back closer to the monthly high, albeit lacked follow-through buying.
- Bulls, so far, have been struggling to make it through a descending trend-line hurdle.
- The technical set-up supports prospects for an eventual breakout to the upside.
The GBP/USD pair struggled to capitalize on a modest intraday uptick back closer to the monthly high and was last seen trading in the neutral territory, just above the 1.3600 mark.
Hopes for a diplomatic solution to the Ukraine crisis underpinned the US dollar's safe-haven status. Apart from this, rising bets for additional rate hikes by the Bank of England acted as a tailwind for the British pound and provided a modest lift to the GBP/USD pair. That said, the lack of progress in talks to resolve the problems with the Northern Ireland protocol of the Brexit agreement held back bulls from placing aggressive bets.
From a technical perspective, the GBP/USD pair, so far, has struggled to make it through a resistance marked by a downward sloping trend-line extending from July 2021. This is closely followed by the very important 200-day SMA, around the 1.3685 region and the 1.3700 mark, which if cleared will set the stage for additional gains. The outlook is reinforced by the fact that oscillators on the daily chart have just started gaining positive traction.
That said, it will still be prudent to wait for sustained strength beyond the aforementioned hurdles before positioning for any further appreciating move. The GBP/USD pair might then aim to retest the YTD low, around mid-1.3700s before extending the momentum further towards reclaiming the 1.3800 mark for the first time since October 2021.
On the flip side, any meaningful slide below the 1.3600 mark is likely to find decent support and bought into near mid-1.3500s. Some follow-through selling could make the GBP/USD pair vulnerable to drop back to challenge the key 1.3500 psychological mark en-route the weekly low, around the 1.3485 region touched on Monday.
GBP/USD daily chart
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Technical levels to watch
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