Technical Analysis – GBPUSD rally halts, now hovers just above 1.2750
July 10, 2023 2:28 pm
GBPUSD is edging lower today but remains a tad above the 1.2750 area. The bulls have finally managed to stage a proper breakout, but a double top pattern appears to be forming. This bearish structure could quickly reverse the current bullish sentiment but a move below its 1.2590 neckline is needed first.
The bulls continue to enjoy the support of most momentum indicators. The stochastic has just broken above its moving average and it is trying to return to its overbought territory. Interestingly, the Average Directional Movement Index (ADX) is preparing to signal the presence of a muted bullish trend. Only the RSI appears to have peaked, and it is currently edging towards its 50-midpoint.
Should the bears decide to stage a move back inside the rectangle, they would first have to clear the 61.8% Fibonacci retracement of the June 1, 2021 – September 26, 2022 downtrend at 1.2750 and the 50-day SMA at 1.2577. They would then come up against stronger support at the 1.2287-1.2418 area, set by the 50% Fibonacci retracement and the 100-day SMA respectively.
On the other hand, the bulls are keen on recording another upleg. If they manage to keep GBPUSD above 1.2750, they will probably have the chance of testing the resistance set by the December 8, 2022 low at 1.3160. If successful in breaking this level, they could then try their luck at the 1.3748 area.
To conclude, the overall technical picture remains positive for GBPUSD bulls, but a bearish pattern is gradually forming.
GBPUSD is edging lower today but remains a tad above the 1.2750 area. The bulls have finally managed to stage a proper breakout, but a double top pattern appears to be forming. This bearish structure could quickly reverse the current bullish sentiment but a move below its 1.2590 neckline is needed first.
The bulls continue to enjoy the support of most momentum indicators. The stochastic has just broken above its moving average and it is trying to return to its overbought territory. Interestingly, the Average Directional Movement Index (ADX) is preparing to signal the presence of a muted bullish trend. Only the RSI appears to have peaked, and it is currently edging towards its 50-midpoint.
Should the bears decide to stage a move back inside the rectangle, they would first have to clear the 61.8% Fibonacci retracement of the June 1, 2021 – September 26, 2022 downtrend at 1.2750 and the 50-day SMA at 1.2577. They would then come up against stronger support at the 1.2287-1.2418 area, set by the 50% Fibonacci retracement and the 100-day SMA respectively.
On the other hand, the bulls are keen on recording another upleg. If they manage to keep GBPUSD above 1.2750, they will probably have the chance of testing the resistance set by the December 8, 2022 low at 1.3160. If successful in breaking this level, they could then try their luck at the 1.3748 area.
To conclude, the overall technical picture remains positive for GBPUSD bulls, but a bearish pattern is gradually forming.
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