GBP/USD ready to hit 100-day SMA after strong rally [Video]
|GBPUSD had an impressive increase on Monday, jumping above the 50.0% Fibonacci retracement level of the down leg from 1.3515 to 1.1409 at 1.2460 and heading towards the 100-day simple moving average (SMA). The bias in the short-term timeframe remains neutral within the 1.2460 and the 1.2080 lines.
According to momentum indicators, the RSI is flattening above the neutral threshold of 50, while the MACD is climbing above the trigger line and is surpassing the zero line. Additionally, the Ichimoku indicator and the SMAs are moving sideways, confirming the unclear direction.
Should the pair manage to strengthen its positive movement and has a successful attempt above the 100-day SMA, the next resistance could come at 1.2640, taken from the latest highs. A break above it, could open the door for the 1.2710 – 1.2725 zone, which includes the 61.8% Fibonacci. Even higher, the next target could be faced at 1.3210, creating a bullish bias in the near term.
However, if prices are unable to remain above the Ichimoku cloud in the next few sessions, the risk would shift back to the downside with the lower surface of the cloud coming into focus, which lies near the 38.2% Fibo at 1.2212. A drop below the aforementioned barrier would send prices to the 1.2080 support. The next key obstacle to watch lower down is 1.1907, being the 23.6% Fibo before slipping to the 35-year trough of 1.1409, turning the neutral mode to negative again.
In the medium-term, the outlook has been remaining bearish since prices hold below the 14-month peak of 1.3515 over the last six months, while the price is trendless after the bounce off 1.1409.
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