Technical analysis: GBP/USD support base holds firm but advances curbed by 50-MA
|GBPUSD’s bounce at a one-month low of 1.3608, just shy of the floor of the short-term trading range, has become capped by the 50-period simple moving average (SMA). The trendless SMAs have been zig zagging for around two-months and are now holding a slight bearish tilt, with the 50-period SMA exhibiting a more potent negative bearing.
The Ichimoku lines are indicating that downward forces have yet to fully abate, while the short-term oscillators are conveying conflicting messages in directional momentum. The MACD, in the negative zone, has approached the zero threshold after strengthening above its red trigger line, while the RSI is stalling slightly above the 50 level. The bearish charge in the stochastic oscillator is promoting additional negative price action in the pair.
To the downside, swift support could evolve in the area between the 1.3692 and 1.3668 barriers, where the converged Ichimoku lines also currently reside. Successfully steering beneath this boundary, the price may dive for the one-month trough of 1.3608 and the adjacent hardened base of 1.3564-1.3605. A breakdown of this crucial support foundation within the pair, which has held since early February, could cheer sellers to then target the 1.3519 low, identified on January 18.
If buyers make a comeback and regain the upper hand, initial upside limitations may commence with a revisit to the 50-period SMA at 1.3737, followed by a tough resistance region from the 1.3750 nearby high until the 100-period SMA at 1.3780. Breaching upwards this critical barricade, which also comprises the 200-period SMA and the Ichimoku cloud’s upper surface, the price could jump to test the 1.3812-1.3819 resistance hurdle. From here, additional gains may stumble around the 1.3853 mark before the pair propels to challenge the 1.3900-1.3912 obstacle.
Summarizing, in the near-term timeframe GBPUSD is ranging between 1.3564 and 1.4000. Nonetheless, price action appears to be confined to the lower part of the trading range for now with a negative tone still intact.
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