GBP/USD begins 2024 in a muted tone

• GBPUSD pares some gains after posting a 4-month peak.

• But remains within its upward sloping channel.

• Positive bias holds as momentum indicators are skewed to the upside.

GBPUSD had been forming a profound structure of higher highs following its break above a crucial descending trendline in early November. Although the pair’s rally has temporarily paused at the four-month peak of 1.2826, the impending completion of a golden cross between the 50- and 200-day simple moving averages (SMAs) could infuse upside pressures.

Given that the short-term oscillators are providing cautiously positive signals, the bulls could attempt to erase the latest weakness and conquer the December resistance of 1.2793. A violation of that hurdle could open the door for the four-month peak of 1.2826. Failing to halt there, the pair might advance towards the June high of 1.2847.

On the flipside, if the pair reverses lower, a couple of previous resistance territories such as 1.2732 and 1.2678 may now act as initial lines of defense. Piercing through that floor, the price may then descend towards the recent support of 1.2611. Even lower, the December bottom of 1.2500 could provide downside correction.

In brief, even if GBPUSD’s advance seems to be losing steam, near-term risks remain cautiously tilted to the upside. For that to change, the price needs to decisively break below its upward sloping channel.