GBPUSD is neutral in the short-term and trading in a range between 1.3026 and 1.3337 following a decline from 1.3656. The RSI and MACD are neutral as momentum has weakened, suggesting the consolidation phase is expected to continue in the near term.
Risk is tilted to the downside as gains have stalled in the past few days below the 50% Fibonacci retracement level (1.3215) of the latest rally from 1.2773 to 1.3656. The market is also trading below the 50-day moving average. Prices need to rise above the 38.2% Fibonacci at 1.3318 to weaken downside pressure and shift the market’s focus to the upside for a re-test of the 1.3656 high. From here the market would see a resumption of the longer-term uptrend.
Key support is at the psychological level of 1.3000. A move lower would target the 1.2773 low to retrace all of the August to September rise. Any further extension lower would shift the short-term bias from neutral to bearish.
In the bigger picture GBPUSD is slowly tracking higher and the bullish crossover of the 50 and 200-day moving averages back in May supports the trend higher. But the market needs to remain above the key 1.3000 level to keep upside momentum going.
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