Technical Analysis – GBP/USD’s retraction unable to tilt appreciation scale

gbp4GBPUSD continues to echo a positive tone despite recently retreating from a fresh 32-month high of 1.3703. The rising red Tenkan-sen line is suggesting positive momentum is growing, while the flattening blue Kijun-sen line is indicating that the ascent is under stress. Nonetheless, the advancing simple moving averages (SMAs) are defending the bullish picture.

Furthermore, the short-term oscillators are conveying a pickup in positive sentiment. The MACD remains some distance above the zero line despite weakening slightly below its red trigger line, while the upwards pointing RSI manages to persist in bullish territory. Also broadcasting additional price strength is the stochastic %K line, which ricocheted off the 20 mark and above the %D line.

If buyers manage to drive the price over the red Tenkan-sen line at 1.3580, initial resistance may develop at the ceiling of 1.3671-1.3703. Overcoming this boundary, the pair could jump towards the 1.3792 high from April 2018. In the event the climb persists, the bulls may meet the 1.3890 barrier before targeting the 1.4000 key handle.

On the other hand, if sellers steer the pair lower, early support may stem from the zone of 1.3428-1.3450. Diving from here, the price could hit the 50-day SMA at 1.3367, ahead of the neighbouring 1.3303 border, before a deeper retracement tests the 1.3186 trough, coupled with the 100-day SMA.

Summarizing, GBPUSD maintains a bullish demeanour above the 1.3428 level and the SMAs. Yet, a deeper retracement below 1.3303 could start to undermine the positive structure, which is safeguarded by the 1.3105-1.3134 base.

Origin: XM

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