Weakening and falling below 1.3400 as USD recovers

• GBP/USD falls to 1.3389 from a yearly high of 1.3429 as the US dollar strengthens.
• Retracement at the top of an ascending channel at 1.3363 may provide buying opportunities, with RSI still favoring buyers.
• Holding above 1.3363 could push GBP/USD to retest the yearly high of 1.3429 and target 1.3437, 1.3450 and 1.3500.
• Break below 1.3363 could lead to a test of the week’s low at 1.3248 and further support at the September 19 low of 1.3153.

Sterling lost some momentum against the US dollar in early trade during the North American session on Wednesday, after hitting a yearly high of 1.3429. GBP/USD is trading at 1.3389, down 0.18% as the greenback recovers some ground.

GBP/USD Price: Technical Insights

Technically, GBP/USD’s pullback towards the top of an ascending channel at 1.3363 has opened the door for further buying as seen by the price action.

The Relative Strength Index (RSI) suggests that buyers remain in charge. However, in the short term, GBP/USD could print another advance before resuming its rally, which could test the 1 March 2022 peak at 1.3437.

If GBP/USD stays above 1.3363, this could pave the way to challenge the current yearly high of 1.3429. Next, it will expose 1.3437, followed by the 1.3450 figure, ahead of 1.3500.

Conversely, if the pair breaks below 1.3363, it could touch the current week’s low of 1.3248. On further weakness, the next line of defense for the bulls will be the September 19 daily low of 1.3153.

GBP/USD Price Action – Daily Chart