Technical Analysis – GBPUSD retains upswing but needs more backing
October 10, 2023 8:27 am
GBPUSD pauses upturn from seven-month low
Short-term signals are improving but threats exist
GBPUSD has been stagnant around the 1.2235 barrier for two days, hindered by the 20-day simple moving average (SMA) and the resistance line from July.
Encouragingly, the technical indicators keep pointing upwards, with the RSI further distancing itself from its 30 oversold region and the MACD recovering above its red signal line. On the other hand, the stochastic oscillator is crawling into the oversold territory, signaling the bears might be around the corner.
Nevertheless, some caution might be necessary as the journey higher is expected to be challenging. An extension above the 20-day SMA could pause near 1.2340, where the descending line from May 2021 is located. Then, the 1.2400-1.2430 zone, which encapsulates the resistance trendline from mid-July and the 200-day SMA, could immediately block the way towards the 50-day SMA and the 1.2500 round level. A decisive break above the latter would brighten the short-term outlook.
Should the price pull below the 1.2235 zone, it may initially stabilize near the 1.2100 constraining zone. Failure to pivot there could turn the spotlight to the seven-month low of 1.2036, a break of which could immediately find support near the falling line drawn from November 2021 at 1.1980. If more sellers step in, the 1.1900 psychological mark could be the next destination. To sum up, GBPUSD is facing an improving short-term bias, but it will need a stronger performance to achieve a bullish outlook.
GBPUSD pauses upturn from seven-month low
Short-term signals are improving but threats exist
GBPUSD has been stagnant around the 1.2235 barrier for two days, hindered by the 20-day simple moving average (SMA) and the resistance line from July.
Encouragingly, the technical indicators keep pointing upwards, with the RSI further distancing itself from its 30 oversold region and the MACD recovering above its red signal line. On the other hand, the stochastic oscillator is crawling into the oversold territory, signaling the bears might be around the corner.
Nevertheless, some caution might be necessary as the journey higher is expected to be challenging. An extension above the 20-day SMA could pause near 1.2340, where the descending line from May 2021 is located. Then, the 1.2400-1.2430 zone, which encapsulates the resistance trendline from mid-July and the 200-day SMA, could immediately block the way towards the 50-day SMA and the 1.2500 round level. A decisive break above the latter would brighten the short-term outlook.
Should the price pull below the 1.2235 zone, it may initially stabilize near the 1.2100 constraining zone. Failure to pivot there could turn the spotlight to the seven-month low of 1.2036, a break of which could immediately find support near the falling line drawn from November 2021 at 1.1980. If more sellers step in, the 1.1900 psychological mark could be the next destination.
To sum up, GBPUSD is facing an improving short-term bias, but it will need a stronger performance to achieve a bullish outlook.
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