GBPUSD has rebounded somewhat after falling to a 20-month low of 1.2475 on December 12 and momentum indicators are endorsing that the market sentiment might get better and create some gains in the daily timeframe. The RSI indicator is sloping slightly up in the negative territory, while the MACD oscillator is also looking to change direction and is ready to create a bullish crossover with its trigger line in the bearish zone.
Should upside movement dominate in the near term, the market might revisit the 1.2690 resistance level before meeting the 20-day simple moving average (SMA) around 1.2710. Above that, the area around the 40-day SMA near 1.2805 could be the next level for investors to look for. Steeper increases may overcome that point and test the 1.2925 barrier, which is the 23.6% Fibonacci retracement level of the downleg from 1.4375 to 1.2475. Also, the long-term descending trend line could act as strong obstacle for the bulls.
Alternatively, if the price manages to move lower again, support could come from the previous trough at 1.2475. Further down, the price could rest around the 1.2360 hurdle, taken from bottom on April 2. A rally beneath this region would increase chances that the downtrend is in progress and challenge the 1.2100 psychological level.
To sum up, in the long-term view, the downfall from 1.4375 is still active and hence the outlook remains negative.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.