GBPUSD has been in a strong bullish tone for seven consecutive days, climbing to a more than four-month high of 1.2903. The pair is challenging the upper boundary of an upward sloping channel, which has been holding since the end of March.
In momentum indicators, the MACD oscillator is holding above its trigger and zero lines, while the RSI is approaching the overbought territory, suggesting a possible pullback in the short-term timeframe. The Ichimoku lines are still pointing upwards, while the 20- and 40-day simple moving averages (SMAs) are following the price action up.
A strong climb above the 1.2900 handle could send the market towards the 1.3210 – 1.3285 resistance zone, taken from the peaks on March 8 and the end of December 2019. Clearing these levels, the price could open the door for the 14-month high of 1.3515.
Otherwise, a drop below the 1.2815 barrier could hit the 61.8% Fibonacci retracement level of the down leg from 1.3515 to 1.1409 at 1.2710, which coincides with the red Tenkan-sen line. Lower, the market could flirt with the 20- and 40-day SMAs currently around 1.2630 and 1.2570 respectively. Marginally below these lines, the Ichimoku cloud and the 50.0% Fibonacci of 1.2460 could provide significant support ahead of the 100-day SMA at 1.2395.
Summarizing, GBPUSD is in positive mode and is searching the opportunity to create new highs in the near term.
Origin: XM
