GBPUSD is testing the 1.3000-1.3080 area, where a broken long-term descending trendline stretched from the 2015 highs happens to be, following the strong rebound at the bottom of the ascending channel and near the 200-day simple moving average (SMA).
The pair is also making an attempt to extend beyond its 50-day SMA as the RSI and the MACD are flashing a bullish bias, with the former running above its 50 neutral mark and the latter improving above its signal and zero lines.
For the bulls to get fresh fuel and reduce the case of a downtrend though, the price should close above 1.3080. In this case, the spotlight will turn straight to the channel’s upper surface currently seen around 1.3200. Beyond that, another battle could take place near 1.3330, and if this proves an easy to win, the door would open for the 1.3481 top.
In the event the price retreats below the 23.6% Fibonacci of the 1.1409-1.3481 upleg, at 1.2992, it would be interesting to see if the 20-day SMA at 1.2880 can provide immediate footing ahead of the bottom of the channel. Slightly lower, the 200-day SMA, which remains flat at 1.2700, could trigger a sharper sell-off towards the 50% Fibonacci of 1.2445 if it gives way.
Meanwhile in the medium-term picture, the positive outlook has weakened following September’s downfall. But a break below June’s low of 1.2250 is still needed to switch it to neutral.
Summarizing, GBPUSD is expected to gain additional positive traction if it successfully clears the 1.3080 level. Otherwise, it may reverse south again to meet the 20-day SMA at 12880 before moving to the bottom of the channel.