GBP/USD Holds Below February 2022 High for Now

British Pound Outlook: GBP/USD

GBP/USD extends the decline from earlier this week to hold below the February 2022 high (1.3644), with the recent weakness in the exchange rate keeping the Relative Strength Index (RSI) below 70.

GBP/USD Holds Below February 2022 High for Now

GBP/USD carves a series of lower highs and lows as it continues to fall from a fresh yearly high (1.3593), and the exchange rate may depreciate over the remainder of the month as the RSI seems to be reversing ahead of overbought territory.

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In turn, GBP/USD may further retrace the advance from the monthly low (1.3196) as there seems to be a broad-based recovery in the US Dollar, but the exchange rate may continue to track the positive slope in the 50-Day SMA (1.3197) as it holds above the moving average.

With that said, the recent decline in GBP/USD may turn out to be temporary should it struggle to extend the bearish price series from earlier this week, and the exchange rate may stage further attempts to test the February 2022 high (1.3644) as it no longer trades within the April range.

GBP/USD Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; GBP/USD on TradingView

• GBP/USD pulls back ahead of the February 2022 high (1.3644) to carve a series of lower highs and lows, and lack of momentum to hold above the 1.3410 (78.6% Fibonacci retracement) to 1.3460 (23.6% Fibonacci extension) region may push the exchange rate toward 1.3310 (100% Fibonacci extension).
• Next area of interest comes in around 1.3210 (50% Fibonacci extension), but GBP/USD may stage further attempts to test the February 2022 high (1.3644) should it continue to track the positive slope in the 50-Day SMA (1.3196).
• Need a break/close above 1.3650 (38.2% Fibonacci extension) to open up the 2022 high (1.3749), with the next area of interest coming in around 1.3800 (161.8% Fibonacci extension) to 1.3810 (50% Fibonacci extension).

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--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong