GBPUSD retraced to an almost one-month low of 1.3640 on Monday after a multi-day battle with the 200-day simple moving average (SMA) and the 1.3840 barrier, where a dashed resistance trendline also happens to be.
The pair is currently trying to heal yesterday’s wounds, but downside risks remain intact as the RSI is fluctuating comfortably below its 50 neutral mark, the Stochastics have yet to bullishly cross each other in the oversold area, and the MACD continues to stretch within the negative zone and below its red signal line.
As regards the market structure, the three-month-old neutral trajectory is still in place despite the recent sell-off and only a decisive close below the lower boundary of 1.3600 would put the pound back on the bearish path. If that is the case, support could be next detected within the 1.3500 – 1.3450 restrictive area, last active from the end of 2019 to the start of 2021.
On the upside, the bulls will need a clear victory above the 200-day SMA at 1.3840 to sustainably drive towards last week’s peak of 1.3912, though the 20- and 50-day SMAs could challenge any bullish attempts beforehand around 1.3780. Should the rally face no limits, the door would open for the 1.3982-1.4000 resistance zone, a break of which could open the door for the 1.4100 handle. Still, unless the pair resumes the long-term uptrend above the three-year high of 1.4248, there won’t be much to celebrate.
In brief, the technical signals remain discouraging for GBPUSD despite today’s push for some recovery. A move below 1.3600 could bring new sellers into the market, switching the outlook to bearish, while a bounce above 1.3840 could enhance buying exposure in the market.
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 stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range 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 helps 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 above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its 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.