GBP/USD Price Analysis: Risks a drop to 200-DMA at 1.3770, US inflation eyed

• GBP/USD extends a four-day losing streak ahead of the US CPI data.
• The cable is challenging 21-DMA support at 1.3831.
• Bearish RSI calls for a test of the 200-DMA support.

Following the rejection above 1.3900 last Friday, GBP/USD is extending the bearish momentum into the fourth straight this Wednesday.

At the time of writing, GBP/USD is challenging the 21-Daily Moving Average (DMA), eyeing a sustained move below the latter amid a broadly firmer US dollar amid mixed market mood.

Investors remain cautious and refrain from placing fresh bets in the risk asset, the cable, ahead of the critical US inflation report due for release at 1230 GMT.

The 14-day Relative Strength Index (RSI) is edging modestly lower below the midline, keeping the floors open for the additional downside.

Therefore, the GBP sellers keep their sight on the upward-sloping 200-DMA at 1.3770 should the selling pressure intensify.

Ahead of that level, the 1.3800 round number could test the bearish commitments.

GBP/USD: Daily chart

Alternatively, the cable bulls need to regain ground above 1.3850 to take on Tuesday’s high of 1.3872.

Further up, the spot could face stiff resistance around 1.3895/1.3900, which is the confluence of the August 9 high and psychological level.

GBP/USD: Additional levels to consider