GBP/USD Price Analysis: Bulls look to test 50-DMA resistance at 1.3951
- GBP/USD recaptures 100-DMA barrier, where next?
- Buyers remain unstoppable amid weaker US dollar, risk-on mood.
- RSI points north above the midline, allowing more advances.
GBP/USD is extending its four-day winning streak beyond 1.3900, as the bulls remain unstoppable amid notable US dollar supply and an upbeat market mood.
The greenback remains undermined by falling Treasury yields, thanks to the Fed’s dovish stance while a turnaround in the Chinese stocks has helped lift the broader market sentiment.
Further, the gains in the cable could be also associated with the renewed Brexit optimism, as the European Union (EU) softens its legal threat over the Northern Ireland (NI) protocol, as urged by the UK Brexit Minister David Frost.
Attention now shifts towards the ley US advance GDP for the second quarter for fresh trading impetus.
From a near-term technical perspective, the GBP bulls have finally reclaimed ground above the 100-Daily Moving Average (DMA) at 1.3924, although they await a daily closing above the latter to extend the uptrend.
On acceptance above the mildly bearish 50-DMA at 1.3951 could be probed by the bullish traders.
The Relative Strength Index (RSI) is pointing north towards the overbought territory while above the midline, suggesting that there is more room to the upside.
Further up, the buyers will target the 1.4000 psychological barrier.
GBP/USD: Daily chart
On the flip side, the bears need to beat the intraday low of 1.3898 to regain control. The next significant support is seen at Wednesday’s low of 1.3843.
If the downswing picks up pace, then a test of the horizontal 21-DMA at 1.3807 cannot be ruled out.
The last line of defense for the GBP bulls is aligned at the upward-sloping 200-DMA at 1.3731.
GBP/USD: Additional levels