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April 21, 2021

GBP/USD Retreats After ‘Test’ $ 1.4000 Resistance

 The strengthening momentum on the GBP/USD chart at the beginning of the week failed to be sustained in yesterday's trading after the price showed a decline again.

Meet analysts' expectations for the price to reach a high of 1.40000. However, testing the resistance level the price then made a decline again around 80 pips towards the RBS zone (resistance become support) 1.39200.

The bearish factor was driven by the re-depreciation of the US dollar in the market following the fall of major indices in the United States (US) market prompting investors' concerns over market risky sentiment.

The pound also failed to sustain its strengthening after the published UK employment data report was mixed. Unemployment claims and unemployment rates are seen declining. But average income fell lower than expected.

The price movement in the RBS zone of 1.39200 will be evaluated and the Moving Average 50 (MA50) level on the 1 hour time frame will also give an indication for the direction of further movement.

If the price manages to resume the rise, the resistance level of 1.4000 will again be tested before the continued rise will head up to around 1.41000.

On the other hand prices will continue to fall lower if the US dollar remains strong and puts pressure on the Pound.

The lower decline is seen to return to last week’s RBS focus zone at 1.38000.

Investors will be wary of Pound trading at the start of today’s European session ahead of the forthcoming UK inflation data.