GBP/USD: Rejection at 1.1500 recalls sellers ahead of Truss, US data
- GBP/USD is off the lows but remains vulnerable near 1.1400.
- The US dollar recovery strengthens amid broad risk aversion.
- Cable bears eye 21 DMA once again after rejection at 1.1500.
GBP/USD is correcting from three-week highs of 1.1495, snapping a six-day uptrend, as the US dollar jumps back on the bids amid broad risk aversion.
Escalating geopolitical tensions between Russia and Europe over the Ukraine war keep investors on the edge. The European Union (EU) backs sanctions against Russia, including the oil price cap. The flight to safety team persists, underpinning the dollar’s safe-haven appeal.
Investors refrain from placing any directional bets on the pound ahead of UK PM Liz Truss’ address to the Tory party. In the meantime, cable finds some comfort from the upward revision to the UK final S&P Global Services PMI, which came in at 50.0 in September.
Attention now turns towards the US ADP employment and ISM Services PMI due later in the NA session for fresh trading opportunities.
As observed on a daily chart, GBP/USD eyes the horizontal 21-Daily Moving Average (DMA) at 1.1297 on its retreat from higher levels.
The next downside target is seen at 1.1250 the psychological level.
The 14-day Relative Strength Index (RSI), however, is holding above the midline while keeping the bullish bias intact.
Alternatively, the descending trendline resistance at 1.1662 remains on buyers’ radars once the 1.1500 level gets cleared.
GBP/USD: Daily chart
GBP/USD: Additional technical levels