GBP/USD Price Analysis: Breaks through 200-hour SMA hurdle, retakes 1.3500 amid weaker USD

• GBP/USD gained traction for the third successive day on Tuesday and shot to a multi-day high.
• Sustained move beyond the 200-hour SMA/1.3500 mark might have set the stage for further gains.
• Only a convincing break below the 1.3400 round figure will negate the intraday positive outlook.

The GBP/USD pair shot to a four-day high during the first half of the European session, with bulls now looking to build on the momentum beyond the 1.3500 psychological mark.

Following a brief consolidation earlier this Tuesday, the GBP/USD pair gained traction for the third straight day and built on its recent bounce from a one-month low, around the 1.3360-1.3355 area. The uptick was sponsored by the ongoing US dollar retracement slide and expectations that the Bank of England will hike interest rates at its upcoming meeting on Thursday.

From a technical perspective, sustained breakthrough the 23.6% Fibonacci retracement level of the 1.3749-1.3358 downfall was seen as a fresh trigger for intraday bullish traders. Some follow-through buying beyond the 200-day SMA might have already set the stage for additional gains. The outlook is reinforced by positive oscillators on hourly/daily charts.

That said, RSI (14) on the 1-hour chart has just started moving into the overbought territory and warrants some caution before positioning for any further appreciating move. This, in turn, suggests that the ongoing move up is likely to pause near the 38.2% Fibo. level, which is closely followed by resistance near the 1.3520-1.3525 supply zone.

On the flip side, any meaningful pullback now seems to find decent support near the 23.6% Fibo. level, around mid-1.3400s. This is followed by 100-hour SMA, around the 1.3430 region, which if broken would make the GBP/USD pair vulnerable to break below the 1.3400 mark. The downfall could get extended towards last week's swing low, around the 1.3355 area.

GBP/USD 1-hour chart

Levels to watch