- GBP/USD struggles to extend the previous day’s rebound from one-month low, sidelined of late.
- Oscillators suggest further recovery but death cross on the EMAs and 61.8% Fibonacci retracement level probe bulls.
- Five-week-old horizontal support area offers extra filters to the south.
GBP/USD fades the previous day’s rebound from a monthly low around 1.2050 heading into Wednesday’s London open. In doing so, the Cable pair justifies the bearish moving average crossover on the four-hour chart below the key Fibonacci retracement level.
That said, the 50-bar Exponential Moving Average (EMA) crosses the 200-bar EMA from above, which in turn portrays the “Death cross” and suggests further downside of the GBP/USD pair. Also challenging the quote is the 61.8% Fibonacci retracement level of January 06-23 upside, near 1.2080.
It should be observed, however, that the gradual rise in the RSI (14) and the recently firmer MACD signals keep buyers hopeful.
As a result, the GBP/USD pair’s run-up beyond the immediate 1.2080 can’t be ruled out. In that case, the 50% Fibonacci retracement and the 200-EMA, respectively near 1.2150 and 1.2200, will be important to watch.
Should the pair remains firmer past 1.2200, it can again try to cross the 1.2445-50 horizontal hurdle.
On the flip side, the 1.2000 psychological magnet precedes the latest swing low near 1.1960 to limit the short-term GBP/USD downside.
Following that, a horizontal area comprising multiple levels marked since January 03 and the previous monthly low, close to 1.1930 and 1.1840 in that order, should lure the pair sellers.
GBP/USD: Four-hour chart
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Trend: Limited upside expected
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