GBPUSD closed confidently above the 1.2570 resistance area on Wednesday after a short period of consolidation, raising hopes that the bounce off 1.2410 may get new legs in the short term ahead of today’s BoE policy announcement (12:00 GMT).
The pair is currently giving up some ground, but the positive trajectory in the RSI and the Stochastics, which have recently exited the oversold territory, and the gradual recovery in the MACD, are sending encouraging signals that buying appetite could soon return.
Immediate resistance to upside movements could pop up somewhere between the former barrier of 1.2670 and the 1.2740 mark. An extension above this region could retest the 20-day simple moving average currently (SMA) at 1.2811, while the lower band of the broken bearish channel is within breathing distance at 1.2850 and will be closely watched as any step higher from here could secure an acceleration to 1.3000. The 50-day SMA is nearing that number as well.
In the big picture, substantial efforts will be needed beyond 1.3300 to correct the bearish trend in the market.
In the event selling tendencies persist, pressing the price beneath 1.2485, the focus will shift back to the 1.2312 level, which coincides with the 61.8% Fibonacci retracement of the 2020 rally. Failure to pivot here could see a continuation towards the 1.2074 low from May 2020 and the 78.6% Fibonacci marginally lower at 1.2017.
All in all, despite its current weakness, GBPUSD has strengthened the case for an upside reversal following the cross above 1.2580 yesterday. On the other hand, a drop below 1.2485 could scrap such a scenario.
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 stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.