GBPUSD continues trading within the last few months’ range and has been respecting the key 1.3000 support level. The upward trajectory from multi-decade lows is still in progress and there are no signs of a trend reversal yet. The intra-day bias is to the upside.
The short-term neutral trend has been ranging between 1.3026 and 1.3337 following a decline from 1.3656. Recent gains have stalled below the 50-day moving average which is now acting as resistance. Prices have not traded above this level (1.3260) since early November. Breaking above it would target resistance at 1.3300 (round figure) and 1.3318 (38.2% Fibonacci retracement of the latest rally from 1.2773 to 1.3656). This Fibonacci level is near the range-high and if the market rises above it then downside pressure would weaken and shift the focus to the upside for a re-test of the 1.3656 high. From this point GBPUSD would see a resumption of the longer-term uptrend.
Key support is at the psychological level of 1.3000. A move lower would target the 1.2773 low to retrace all of the August to September rise. Any further extension lower would shift the short-term bias from neutral to bearish.
In the bigger picture GBPUSD is slowly tracking higher and the crossover of the 50 and 200-day moving averages back in May gave a bullish signal. The MACD is neutral, suggesting the consolidation phase is incomplete but near-term risk is tilted to the upside as indicated by the rising RSI.
Origin: XM
