- GBP/USD attracted some dip-buying on Thursday and recovered the early lost ground.
- The technical setup favours bullish trades and supports prospects for additional gains.
- A sustained break below the 1.3400 round figure is needed to negate the positive bias.
The GBP/USD pair recovered intraday losses and was last seen trading in the neutral territory, just below the key 1.3500 psychological mark, or the monthly high touched earlier this Thursday.
Looking at the broader picture, the recent strong recovery move from the YTD low paused near a hurdle marked by the 50% Fibonacci level of the 1.3834-1.3161 downfall. This coincides with the November 19 swing high and should act as a key pivotal point for short-term traders.
Given the recent move beyond the 1.3375-80 barrier, the overnight sustained breakthrough the 38.2% Fibo. and the 50-day SMA confluence favours bullish traders. This along with positive oscillators supports prospects for a further near-term appreciating move for the GBP/USD pair.
Hence, a subsequent strength towards the next relevant resistance, near the 1.3565 region, remains a distinct possibility. The mentioned area comprises 61.8% Fibo. level and the 100-day SMA, which if cleared decisively would be seen as a fresh trigger for bullish traders.
On the flip side, the daily swing low, around the 1.3455-50 region, now seems to protect the immediate downside. Any subsequent decline could be seen as a buying opportunity near the 38.2% Fibo. level/50-DMA confluence resistance breakpoint and remain limited near the 1.3400 mark.
Failure to defend the mentioned support levels, leading to a further slide below the 1.3385-75 region might shift the bias back in favour of bearish traders. The GBP/USD pair could then accelerate the fall towards testing the 23.6% Fibo. level, around the 1.3320 area.
GBP/USD daily chart
Levels to watch
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