Despite widespread risk aversion, the GBP/USD makes a remarkable return.
The cable bulls are up against tough resistance at 1.3800, and the negative bias is still in place.
Sellers maintain control due to an impending bear cross and an RSI below 50.
The pound has outperformed across the forex board so far this Thursday, as it attempts to recover amid widespread risk aversion.
The bounce in the cable from 1.3760 could be linked to new selling in the US dollar, as Treasury yields continue to fall, dragging the greenback lower.
Resurgent covid fears, as well as the potential impact on the global economic recovery, continue to depress investor mood.
However, due to Britain’s superior success in vaccinations, the pound emerges as the strongest of the bunch. The United Kingdom has the largest number of dosages per 100 individuals in the world.
The currency pair’s four-hour chart reveals that the price has managed to bounce off ascending trendline support at 1.3761 in the short term.
However, under an oncoming bear cross, with the 21-Simple Moving Average (SMA) on the edge of cutting the 50-SMA from above, the recovery appears elusive.
Furthermore, despite ticking marginally higher, the Relative Strength Index (RSI) remains below 50, maintaining the selling interest.
A decline towards 1.3700 is not ruled out if the bears achieve a decisive break below the stated support.
To offset the near-term negative trend, the GBP bulls would require a four-hourly close above the 1.3824 barrier, which is the intersection of the 21 and 50-SMAs.
On their way back up, buyers would aim for the 1.3850 level./n
