GBP/USD continues to trade in a relatively tight range below 1.3500 on Thursday as investors remain on the sidelines while waiting for the next significant catalyst. The mid-tier data releases from the US were largely ignored by market participants.

The US Department of Labor's weekly Initial Jobless Claims will be the only data featured in the US economic docket. Furthermore, market participants will keep a close eye on US Treasury bond yields following Wednesday's sharp decline. Unless the benchmark 10-year US T-bond yield reclaims 1.6%, the greenback could find it difficult to outperform its rivals. Additionally, the S&P Futures are up 0.2% in the early European session and the dollar could face additional selling pressure in case risk flows start to dominate the markets in the second half of the day.

 Although the last six candles on the four-hour chart closed in the positive territory, the Relative Strength Index (RSI) indicator stays below 70, suggesting that there is more room on the upside before GBP/USD becomes technically overbought.

As of writing, the pair is trading above 1.3500 - the Fibonacci 61.8% retracement of the downtrend witnessed following the BoE's decision to leave its policy rate unchanged earlier in the month. In case buyers manage to continue to defend this level, GBP/USD could continue to push higher toward 1.3550 (100-period SMA) and 1.3570 (static level).

On the downside, 1.3470 (Fibonacci 50% retracement, 50-period SMA) aligns as the first support before 1.3440 (Fibonacci 38.2% retracement) if 1.3500 fails.

GBPUSD Looking for correction

Nov 18 2021