GBP/USD analysis: caution ahead of 1.3000

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2949

The Pound managed to extend its rally to a fresh 7-month high of 1.2964 against its American rival, despite a weak UK Q1 GDP reading. The economy in the kingdom grew by just 0.3% according to preliminary estimates, hurt by the sharp advance in inflation triggered by the Brexit decision. Minor figures were released all through the week, still indicating some degree of resilience, although starting to dent confidence in the future developments. The pair closed the week at 1.2950, with market players eyeing the major psychological barrier at 1.3000, where large buying interest is expected to surge, at least on a first attempt of breaking higher. The pair retains its bullish technical stance according to the daily chart, as the price advanced far above its moving averages, whilst the RSI indicator heads north around 74 and the Momentum indicator consolidates near overbought readings. Still, unless the 1.3000 region is clearly broken, caution is recommended at current levels. According to the 4 hours chart, the risk is also towards the upside, as the 20 SMA maintains its bullish slope, currently around 1.2880, while technical indicators have partially lows upward strength, but hold near overbought levels.

Support levels: 1.2880 1.2830 1.2795

Resistance levels: 1.2965 1.3010 1.3060

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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