Technical Analysis – GBPUSD gives up gains on stronger US CPI data
October 12, 2023 2:26 pm
GBPUSD switches into bearish corrective mode
Price fluctuates between key support and resistance zone
A break below 1.2235 may prompt more selling
GBPUSD returned to losses below the 1.2300 level in the wake of a slightly stronger US CPI inflation report, shifting the spotlight back to the 20-day simple moving average (SMA) at 1.2235.
Technically, the pair lost momentum after touching the falling constraining line from May 2021 at 1.2340, with the stochastic oscillator witnessing overbought conditions.
Sellers may not act forcefully until the price dives below its 20-day SMA. In this case, the pair could fall significantly to 1.2100, while a more aggressive downfall could see a retest of the October low of 1.2036. The downward-sloping line from November 2021 could immediately buffer additional declines at 1.1980 ahead of the 1.1900 round level.
With the RSI and the MACD sustaining an upward trajectory, though, an upside reversal might not be surprising. The bulls might fight against the 1.2340 barrier, but if they can surpass the 50- and 200-day SMAs and go beyond 1.2500, it would add credibility to the bullish momentum. The next target could be the 1.2588 region, where the price paused a couple of times from April onwards.
Overall, GBPUSD is printing its first negative day after a week of continuous gains. Selling pressures could stay limited unless the price tumbles below 1.2235.
GBPUSD switches into bearish corrective mode
Price fluctuates between key support and resistance zone
A break below 1.2235 may prompt more selling
GBPUSD returned to losses below the 1.2300 level in the wake of a slightly stronger US CPI inflation report, shifting the spotlight back to the 20-day simple moving average (SMA) at 1.2235.
Technically, the pair lost momentum after touching the falling constraining line from May 2021 at 1.2340, with the stochastic oscillator witnessing overbought conditions.
Sellers may not act forcefully until the price dives below its 20-day SMA. In this case, the pair could fall significantly to 1.2100, while a more aggressive downfall could see a retest of the October low of 1.2036. The downward-sloping line from November 2021 could immediately buffer additional declines at 1.1980 ahead of the 1.1900 round level.
With the RSI and the MACD sustaining an upward trajectory, though, an upside reversal might not be surprising. The bulls might fight against the 1.2340 barrier, but if they can surpass the 50- and 200-day SMAs and go beyond 1.2500, it would add credibility to the bullish momentum. The next target could be the 1.2588 region, where the price paused a couple of times from April onwards.
Overall, GBPUSD is printing its first negative day after a week of continuous gains. Selling pressures could stay limited unless the price tumbles below 1.2235.
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