GBP/USD technical analysis: Break of 1.2740 can reward oversold RSI with additional recovery

Oversold RSI favors buyers but a week-old resistance line acts as an immediate upside hurdle.
Break of 1.2700 could help bears to target January levels.

Anil Panchal FXStreet

Even if oversold levels of 14-bar relative strength index (RSI) triggered GBP/USD pullback, the quote presently confronts a week-long trend-line resistance near 1.2740 ahead of the UK markets open on Monday.

As a result, a successful break of 1.2740 becomes pre-requisite for the quote to extend the latest recovery towards 1.2810 and May 16 high near 1.2865.

During the pair’s additional rise beyond 1.2865, another downward sloping trend-line, at 1.2930 could challenge trade sentiment.

Alternatively, 1.2700 round-figure might hold the pair’s downside confined prior to shifting bears towards January 15 low near 1.2670.

In a case where sellers refrain from respecting 1.2670, 1.2600 and 1.2580 could become their favorites.

GBP/USD 4-Hour chart

Trend: Pullback expected

1. R3 1.2874
2. R2 1.2842
3. R1 1.2776
PP 1.2744
1. S1 1.2678
2. S2 1.2646
3. S3 1.258

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.

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