The GBP/USD pair shot to three-day tops during the mid-European session, with bulls now looking to build on the momentum beyond the 1.3600 mark.

The pair built on the overnight strong intraday rally of around 130 pips and gained follow-through traction for the second successive day on Tuesday. The momentum pushed the GBP/USD pair further away from Friday's five-week lows and was exclusively sponsored by the prevalent selling bias surrounding the US dollar.

The greenback was weighed down by the fact that the Fed stuck to its transitory inflation narrative and indicated that policymakers were in no rush to raise borrowing costs. This, along with a fresh leg down in the US Treasury bond yields, further undermined the greenback and provided a goodish lift to the GBP/USD pair.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Currently, GBP/USD is trading near 1.3570 (Fibonacci 61.8% retracement of the latest uptrend). However, the last four candles on the four-hour chart closed below that level and the Relative Strength Index (RSI) indicator is moving sideways near 50, suggesting that the pair is struggling to gather bullish momentum.

In case GBP/USD climbs above 1.3570 and confirms it as support, it could target 1.3630 /Fibonacci 50% retracement, 50-period SMA) and 1.3660 (200-period SMA).

On the downside, the 20-period SMA forms the initial support at 1.3520 ahead of 1.3500 (psychological level) and 1.3475 (static level).If the resistance zone of 1.3605/1.3610 holds, a decline of the rate might occur. A potential move down could find support in the 100-hour simple moving average at 1.3555. Below the 100-hour SMA, the weekly simple pivot point at 1.3543 might act as support. In the case of the pivot point failing, the 50-hour SMA near 1.3525 might stop a decline.

GBPUSD facing resistance by EMAs in daily

Nov 09 2021