GBP/USD Price Analysis: Defends the critical daily support line but not for long

• GBP/USD’s weekly closing below 21-DMA points to more pain ahead.
• GBP bears need a decisive break below the rising trendline support on the 1D chart.
• Bearish RSI keeps sellers hopeful, as they await BOE-speak due later this Monday.

GBP/USD is reversing a brief dip below 1.3100, although remains almost unchanged on the day, as traders remain cautious ahead of a slew of speeches from the Bank of England (BOE) official later this Monday.

The US dollar is off the multi-day highs against its major peers but holds a major portion of the last week’s rebound, keeping the upside limited in cable. Adding to it, the bond rout extends into a fresh week, with the Treasury yields racing back towards three-year highs amid hawkish Fedspeak.

The FOMC minutes this week will be key for cable traders, as BOE Governor Andrew Bailey’s speech is awaited in the day ahead. Bailey said last Monday that the situation remains very volatile when asked about the May rate decision.  

Looking at GBP/USD’s daily chart, the pair is defending the critical rising trendline support at 1.3104.

Daily closing below the latter will trigger a fresh downswing towards the previous week’s low of 1.3051.

The next downside target is envisioned at the multi-week lows of 1.3000 reached during mid-March.

The pair closed the week below the critical bearish 21-Daily Moving Average (DMA) resistance, now at 1.3129, warranting caution for dip buyers.

Further, the 14-day Relative Strength Index (RSI) remains sluggish below the midline, suggesting that there is enough room for bears to flex their muscles.

GBP/USD: Daily chart

However, acceptance above the 21-DMA support-turned-resistance is critical for initiating a sustained recovery towards the previous week’s high of 1.3190.  

Bulls will then gear up for a test of the three-week highs of 1.3298.

GBP/USD: Additional technical levels