GBP/USD lost its recovery momentum after reaching the highest level in three weeks near 1.1500, in the face of the US dollar upswing and UK political tensions. Cable settled the week modestly flat following a volatile previous week. Market participants now look forward to the Fed minutes and the first-tier UK and US economic releases amid a holiday-shortened week.

GBP/USD dropped below the 20-day SMA on Thursday and closed the second straight day below that level on Friday. Additionally, the Relative Strength Index (RSI) indicator on the daily chart declined below 50, confirming a bearish tilt in the near-term technical outlook.

On the downside, the pair faces key support at 1.1050 (Fibonacci 23.6% retracement level of the latest downtrend) ahead of 1.1000 (psychological level) and 1.0900 (static level, psychological level).

In case GBP/USD manages to rise above 1.1240 (20-day SMA) and starts using that level as support, it is likely to face next resistance at 1.1300 (Fibonacci 38.2% retracement). With a daily close above that hurdle, additional gains toward 1.1460 (Fibonacci 50% retracement) and 1.1500 (psychological level) could be witnessed.

The greenback’s rally lost steam after Wall Street’s opening, as stocks hold on to pre-opening losses without extending their slumps. Some profit-taking ahead of the weekend has helped major pairs to bounce, but that’s not the case for GBP/USD, which currently battles to retain the 1.1100 threshold.

Technical readings in the near-term support a bearish continuation in the near term, particularly if the pair pierces the mentioned weekly low. The next relevant support level is 1.1024, September 30 daily low.

Chances of recovery are pretty much null, although a corrective advance may surge if the pair recovers beyond the 1.1130 price zone.

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