GBP/USD Price Analysis: Cable prods 50-SMA to defend week-start recovery ahead of UK/US statistics
- GBP/USD edges higher after snapping two-day losing streak the previous day.
- Clear rebound from multi-day-old ascending support line, impending bull cross on MACD favor Cable buyers.
- 50-SMA, five-week-old descending trend line restrict Pound Sterling’s immediate upside.
- Full markets return after a long weekend in the US, mid-tier data eyed for fresh impulse.
GBP/USD struggles to defend the week-start rebound while making rounds to 1.2625-30 amid the early hours of Tuesday’s Asian session. In doing so, the Cable pair jostles with the 50-SMA as full markets return after the US Labor Day Holiday. Apart from the 50-SMA, cautious mood ahead of the final readings of the UK S&P Global/CIPS PMIs for August and the US Factory Orders for July month also prods the Pound Sterling.
It’s worth noting, however, that the GBP/USD pair’s successful rebound from an ascending trend line stretched from late May, around 1.2580 by the press time, joins the looming bull cross on the MACD indicator to keep the buyers hopeful.
With this, the quote is likely to overcome the immediate SMA hurdle surrounding 1.2630. The same will allow the Cable pair to prod a five-week-long falling resistance line near the 1.2700 threshold.
However, the Pound Sterling’s upside past 1.2700 will be decisive as it will then have only one hurdle, namely the 200-SMA level of around 1.2740, to cross before inviting buyers home.
Alternatively, the GBP/USD pair’s downside appears elusive unless it stays beyond the aforementioned support line stretched from May, close to 1.2580.
Following that, a three-month-old horizontal support line of around 1.2550 will be important as it holds the key to the Pound Sterling’s slump toward the sub-1.2500 zone.
Overall, the GBP/USD pair is likely to keep the latest gains but the road towards the north appears bumpy.
GBP/USD: Four-hour chart
Trend: Limited upside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
