The GBP/USD pair failed to build on Wednesday’s gains and dropped below 1.0800 in the European session on Thursday. The renewed dollar strength amid risk aversion weighs on the pair as investors keep a close eye on UK gilt markets following the BoE’s intervention.

The Relative Strength Index (RSI) indicator on the four-hour chart started to edge higher after having retreated toward 50 during the Asian trading hours. Additionally, GBP/USD continues to trade above the 20-period SMA, showing that bulls look to retain control of the pair’s action.

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The Relative Strength Index (RSI) indicator on the four-hour chart started to edge higher after having retreated toward 50 during the Asian trading hours. Additionally, GBP/USD continues to trade above the 20-period SMA, showing that bulls look to retain control of the pair’s action.

On the upside, 1.0900 (psychological level, static level) aligns as immediate resistance. With a four-hour close above that level, GBP/USD could target 1.1000 (Fibonacci 38.2% retracement level of the latest downtrend, psychological level) and 1.1040 (50-period SMA).

Supports are located at 1.0800 (psychological level, static level), 1.0755 (20-period SMA) and 1.0700 (Fibonacci 23.6% retracement).

Source- FxStreet