GBPUSD is hovering around the two-month high of 1.2930 after it posted two consecutive green days, having broken above the 40-day simple moving average (SMA) and the descending trend line. This week the pair continues to attract buying interest, with the price climbing slightly above the 23.6% Fibonacci retracement level of the downleg from 1.4375 to 1.2390, around 1.2855.
The technical indicators are still positive in the short-term, with the MACD stretching further above its red trigger line and the RSI moving above the 50 level with strong momentum. Furthermore, the 20- and 40-SMAs are ready to record a bullish crossover in the daily timeframe.
If investors turn their eyes even higher, the pair could re-challenge the 1.3065 resistance, marked by the high on November 14. If bullish actions appear stronger, the market could find resistance at the 1.3145 barrier, which is the 38.2% Fibonacci region before touching the 1.3170 obstacle.
On the flipside, if cable slips back beneath the 23.6% Fibonacci and the 1.2815 support, this could open the door towards the 1.2710 support, which overlaps with the moving averages in the short-term. Moving lower, a violation of these levels would increase negative movement, hitting the 1.2475 support, registered on December 11.
Concluding, the near-risks look to be turning positive after the break above the diagonal line, however, in the long-term, the outlook would shift to bullish if the price action surpasses the 61.8% Fibonacci near 1.3600.
Origin: XM
