GBP/USD is on the back foot, trading below 1.39. UK GDP beat estimates with a drop of 2.9% in January. US yields are climbing once again, keeping the dollar bid. Biden's stimulus and vaccine acceleration are boosting the greenback.
Cable fell one full figure in European trading on Friday, following repeated rejection at psychological 1.40 barrier, deflated by stronger dollar on rise of US yields. Dip was so far contained by the key support at 1.3780 is under pressure and break here would lead to further weakness.
Negative momentum studies on daily chart keep the near-term structure fragile, however GBP/USD is still in positive setup and partially counter downside risk. Expect strong direction signals on break of pivotal points at 1.3800 and 1.4000
Support awaits at 1.3850, a support line from mid-March, and the 1.3830, a cushion from mid-February. The critical line to watch is 1.3775, March's trough.
Some resistance awaits at 1.3925, which was a temporary peak, followed by followed by the psychological barrier of 1.40.