GBP/USD is trading below 1.36, succumbing to dollar strength led by fears of inflation and the looming US debt ceiling. UK gas prices have soared by 40% to record highs, and that is weighing on sterling. The US ADP NFP beat estimates with 568,000.
The currency pair still maintains upside momentum on the four-hour chart that is a bullish sign. However, the pair has slipped back below the 50 Simple Moving Average (SMA) and remains below the 100 and 200 SMAs while the Relative Strength Index (RSI) is outside oversold conditions, thus allowing for more falls.
Support awaits at 1.3525, a support line from early in the week. It is followed by 1.3435, a stepping stone from the previous week, and then by the 2021 trough of 1.34. The next line to watch is only 1.3310.
Resistance is at 1.3590, a cushion from earlier this week followed by the weekly high of 1.3650. Next up, 1.3695 awaits bulls.