GBP/USD’s positive momentum could fade; indicators are flat [Video]

Melina Deltas, CFTe XM

GBPUSD has been moving sideways since the rebound off the 35-year low of 1.1409 on March 20, holding in an upward sloping channel. In the short-term, the market could maintain consolidation if the RSI keeps moving around 50 and the red Tenkan-sen line, as well as the blue Kijun-sen line, hold flat. Also, the MACD oscillator is moving marginally above zero level with weak momentum.

An extension to the upside and above the 61.8% Fibonacci retracement level of the down leg from 1.3515 to 1.1409 at 1.2710 could meet the immediate resistance of 1.2815, taken from the latest high. Further up, resistance could run towards the 1.3210 – 1.3285 area, turning the neutral-to-bullish mode to strongly positive in the medium-term. Steeper increases could also touch the 1.3515 line.

On the other hand, if the pair weakens, the 20- and 40-day simple moving averages (SMAs) which hover around the 50.0% Fibonacci at 1.2460 and the lower surface of the Ichimoku cloud could provide immediate support ahead of the 38.2% Fibonacci of 1.2212. Even lower, the 1.2080 barrier could attract greater attention as any leg lower could worsen the market’s outlook, opening the way towards the 23.6% Fibonacci of 1.1907.

Regarding the medium-term picture, the neutral-to-bullish sentiment deteriorated after the jump towards 1.2815 and only a move above 1.3210 – 1.3285 could now help the market to return to bullish.

Author

Melina Deltas, CFTe

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups.

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