- GBP/USD pares the biggest daily losses in two weeks.
- Key DMAs restrict short-term moves, RSI suggests buyer’s exhaustion.
GBP/USD seesaws around 1.3480 during the initial Asian session on Tuesday. The cable pair dropped the most in two weeks while stepping back from early November highs the previous day.
Even so, the quote remains between the 50-DMA and 100-DMA, suggesting further sideways momentum.
It’s worth noting that the RSI line suggests that the bulls are tired and hence short-term declines toward the 50-DMA level surrounding 1.3400 can’t be ruled out.
However, the 38.2% Fibonacci retracement level of the October-December fall adds strength to the stated support near 1.3400 and challenges the GBP/USD bears.
Should the quote drops below 1.3400, tops marked during late November and mid-December, around 1.3370-75, will act as an extra filter to the south.
On the flip side, 50% Fibo. near 1.3500 round figure will restrict short-term upside moves of the GBP/USD prices ahead of the 100-DMA level of 1.3560.
Following that, the 61.8% Fibonacci retracement level and a three-month-old horizontal line, respectively around 1.3580 and 1.3610, will challenge the pair buyers.
To sum up, GBP/USD rebound seems to find less acceptance but bears need to break the 50-DMA to retake controls.
GBP/USD: Daily chart