- GBP/USD gained traction for the fifth straight day, though a modest USD uptick capped gains.
- Better-than-expected US Q1 GDP print failed to impress the USD bulls or provide any impetus.
- A sustained move beyond the 1.4000 mark is needed to support prospects for a further move up.
GBP/USD is trading at around 1.3950, off the highs. US yields have been rising after components of US GDP showed robust growth. Concerns about Northern Ireland are weighing on the pound.
The four-hour chart is more upbeat for pound/dollar bulls. Momentum remains to the upside while the recent upswing has pushed cable above the critical barrier 1.3910, while the Relative Strength Index (RSI) remains below 70 – outside overbought conditions.
That said, the lack of any strong follow-through buying around the GBP/USD pair warrants some caution for aggressive bullish traders. Hence, it will be prudent to wait for a sustained strength beyond the key 1.4000 psychological mark before positioning for any further near-term appreciating move.
Resistance awaits at 1.3980, which is the fresh swing high. It is followed by 1.4010, April's peak, and then 1.4140, far in the distance. Support is at 1.3930, which held GBP/USD back earlier this week. It is followed by 1.3880, 1.3860 and 1.3820.
