GBP/USD Price Analysis: Rebound appears capped near 1.3330

• GBP/USD attempts a bounce but not out of the woods yet.
• USD drop offers some support but Brexit risks continue to lurk.
• Recovery efforts appear short-lived amid bearish RSI.

GBP/USD is making a minor recovery attempt above 1.3300 on Tuesday, as the US dollar turns south again in tandem with the Treasury yields. Easing Omicron covid variant fears lift the market mood as well as the pound.

However, the UK-France stand-off on the post-Brexit fishing rights and impending deal over the Northern Ireland (NI) protocol will continue to haunt the GBP market.

Meanwhile, the covid woes-led broader market sentiment will continue to impact high beta currencies such as the pound. Fed Chair Jerome Powell’s testimony also remains in focus.

Looking at GBP/USD’s daily chart, the bearish bias remains well in the book, especially after the previous week’s downside breakout from the falling trendline support at 1.3387.

The recent consolidative mode only suggests that the bears are gathering strength before the next push lower.

The 14-day Relative Strength Index (RSI) also hovers below the midline, backing the odds of the additional decline.

On selling resurgence, the eleven-month lows of 1.3278 will get retested should the 1.3300 level give way once again.

GBP/USD: Daily chart

Alternatively, acceptance above the falling trendline support now resistance at 1.3331 is critical to unleashing further recovery gains.

The next upside target for GBP bulls is then seen at Monday’s high of 1.3363, above which the 1.3400 level will come into the picture.

GBP/USD: Additional levels to consider