GBPUSD is testing the topline of the downward-sloping channel, having registered a higher low at 1.3700, and surpassed its 20- and 50-period simple moving averages (SMAs) on the four-hour chart.
The RSI and the MACD are positioned in the bullish area, promoting further improvement in the market as the former is extending its positive momentum above its 50 neutral level and the latter is gaining strength above its signal and zero lines.
A decisive close above the channel and the 1.3855 level will shift the spotlight towards the 200-period SMA at 1.3894. Breaching that line, the bulls could gear up to 1.3950, while slightly higher the 1.4000 mark could be a more important obstacle since any violation here would change the one-month-old market structure from bearish to neutral.
Alternatively, a pullback below 1.3800 may find immediate support between the 20- and 50-period SMAs and the 1.3754 barrier. Failure to rebound here could confirm another negative extension towards 1.3700, while deeper the bears may push for an outlook deterioration below 1.3669.
In brief, even though the short-term risk for GBPUSD seems to be improving on the four-hour chart, the bulls should crawl above the channel’s resistance topline to activate fresh buying interest.
Origin: XM
