- GBP/USD failed to capitalise on the gains of the previous week and remains confined around 1.3900.
- Bulls met a strong resistance barrier near the 1.3900 mark.
- Momentum oscillator is in oversold zone with a bullish crossover.
GBP/USD consolidates gains from the previous two sessions on Tuesday morning’s Asian trading hours. The pair moves in a narrow trading range ahead of the US Consumer Price Index (CPI) data.
The pair fades out its rally after the highly anticipated US-UK trade deals hope dashed out as reports surfaced that there will be likely no agreement for at least two years.
GBP/USD daily chart
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On the daily chart, the formation of Doji candlesticks near the 1.3900 mark, reflects indecisiveness among the traders.
If the pair fails to hold onto the intraday gains, then it could drop toward the 20-day Simple Moving Average (SMA) at 1.3870.
The next lower target would be the previous day’s low at 1.3839 followed by the 1.3810 horizontal support level.
Alternatively, the Moving Average Convergence Divergence (MACD) indicator still points at the underlying bullish sentiment. Any uptick in the MACD could bring bulls back into action.
GBP/USD could touch the 1.3920 and the 1.3950 horizontal resistance levels.
Next, the market participants will march toward June 24 high at the 1.3986 level.