GBP/USD Price Analysis: Profit-taking kicks in amid stronger USD ahead of FOMC minutes

• GBP/USD extended the previous day’s retracement slide from ascending channel resistance.
• A pickup in the US bond yields, risk-off mood benefitted the USD and exerted some pressure.
• Any meaningful slide could be seen as a buying opportunity and is likely to remain limited.

The GBP/USD pair witnessed some selling on Wednesday and eroded a part of the previous day's strong positive move to the highest level since late February, around the 1.4220 region.

A strong pickup in the US Treasury bond yields allowed the US dollar to stage a goodish bounce from multi-month lows. Apart from this, a sharp fall in the equity markets further underpinned the greenback's relative safe-haven status. This, in turn, was seen as a key factor exerting downward pressure on the GBP/USD pair.

Looking at the technical perspective, the recent strong positive momentum stalled near a resistance marked by the top boundary of an upward sloping channel extending from March/April lows. The mentioned hurdle would now act as a pivotal point and help investors to determine the next leg of a directional move for the GBP/USD pair.

Meanwhile, the GBP/USD pair, for now, seems to have snapped three consecutive days of the winning streak and was last seen trading around the 1.4150-40 region. The next relevant support to the downside is pegged near the 1.4100 mark. Any subsequent fall might be seen as a buying opportunity and remain limited near mid-1.4000s.

This is followed by last week's swing lows, around the 1.4000-1.3990 region, below which the GBP/USD pair could accelerate the slide to test ascending channel support, near mid-1.3900s. Sustained weakness below will negate any near-term positive bias, instead prompt some aggressive technical selling and turn the pair vulnerable.

On the flip side, the 1.4190-1.4200 region now seems to cap the immediate upside ahead the ascending channel resistance, currently around the 1.4225-35 area. The mentioned barrier coincides with YTD tops touched in February, which if cleared decisively will mark a fresh bullish breakout and set the stage for a further near-term appreciating move.

GBP/USD 4-hour chart

Technical levels to watch