GBPUSD has pushed off the mid-Bollinger band and above the 1.2780 barrier, making efforts to test the downtrend line drawn from the 8½-month high of 1.3481. That said, traders need to keep in mind the dictating negative bearing of the simple moving averages (SMAs), as they may assist the deteriorating picture.
The short-term oscillators reflect the stall in the bearish structure and mirror prices’ endeavours towards the diagonal line. The MACD, in the negative region, is improving above its red signal line, while the RSI has slipped above the 50 mark. Furthermore, the stochastic oscillator is somewhat holding on to its positive tone.
To the upside, immediate resistance may stem from the descending trend line, fused with the upper Bollinger band around 1.2808. A successful break above the line may meet friction from the 50-period SMA at 1.2842 and the neighbouring 1.2866 high. Additional gains may then encounter the 1.2913 obstacle before challenging the 100-period SMA at 1.2944 and the 1.2965 boundary overhead. Another run up may then tackle the peaks around the 1.3000 handle.
If the restrictive trend line caps upside price action, initial hindrance may come from the 1.2780 level before clashing with the support section of 1.2672 to 1.2690, which encompasses the lower Bollinger band. Diving under this, the price may hit another limiting zone from 1.2623 to 1.2643. Sinking further, the pair may rest at the 1.2573 inside swing high before targeting the 1.2517 trough.
Summarizing, GBPUSD sustains a negative mode underneath the downtrend line and the SMAs. Yet, a decisive close above the restricting line may throw into question the descending formation, while a shift above 1.3055 could turn the bias neutral-to-bullish.
Origin: XM
