Technical analysis: GBP/USD’s broader bearish bias under the microscope [Video]
|GBPUSD is struggling to climb towards the upper Bollinger band which is residing within the 1.2633-1.2690 resistance zone following a price bounce in the vicinity of the 1.2160 support, logged back in May 2020. The diving simple moving averages (SMAs) are still backing the downward trend despite significant developments in the pair, after bouncing around two-year low levels.
Lately, the short-term oscillators have been indicating a constant dwindling in negative momentum, but sellers are starting to push back. The MACD is distancing itself above its red trigger line in negative territory, while the RSI is flirting with the 50 threshold. Meanwhile, the stochastic oscillator has been maintaining a sturdy positive charge in the overbought section, but this promotion of additional upside price action is now being questioned with the dipping in the %K line.
To the upside, tough resistance could originate from the nearby 1.2633-1.2690 boundary, which also encapsulates the upper Bollinger band. Conquering this barrier, the bulls may then target the falling 50-day SMA around the 1.2800 handle before challenging the 1.2854-1.2913 resistance border that stretches back to mid-October 2020. If positive pressures endure, the pair could lift higher to test the 1.3000 hurdle where March and April lows previously froze.
On the flipside, if buying interest continues to fade, support could commence around the mid-Bollinger band at 1.2417 ahead of the 1.2329 low. Steering even lower may boost negative movement in the pair with sellers aiming for the reinforced 1.2160 support, where the lower Bollinger band currently resides and marginal price slippage occurred, recording a near two-year low of 1.2154. If the pair remains heavy and sinks past these obstacles, which would revive the broader bearish trend, the 1.2000 mark could promptly come under attack.
Summarizing, GBPUSD is exhibiting a stubborn broader bearish bias below the 1.2633-1.2690 resistance obstacle and the falling SMAs. A dip in the pair past the mid-Bollinger band may strengthen selling pressures. That said, buyers’ confidence is likely to improve should they manage to steer the price over the 1.2633-1.2690 border, but for optimism to return in the pair, the price would need to pilot back to the 1.3000 price zone.
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