GBPUSD pivoted quickly higher to 1.2394 on the back of rising rate hike expectations in the UK following the plunge to a seven-week low of 1.2308. Technically, the pair staged another bullish correction within a tight, short-term bearish channel.
Despite the bounce in the price, the technical picture in the four-hour chart cannot guarantee a bullish continuation. The pair has yet to cross above its simple moving averages (SMAs), currently facing resistance near the channel’s upper boundary. Meanwhile, the momentum indicators followed the price higher, but the upside move was not enough for the RSI to violate its sideways trajectory above its 50 neutral mark.
In the event the bulls enter the 1.2400 area, the 50-period SMA could immediately block the way towards the 200-period SMA at 1.2480. Even higher, the pair will attempt to close above the 1.2530-1.2550 barrier in order to reach the broken support trendline from September near 1.2570.
If the price pulls below its 20-period SMA and closes beneath the nearby low of 1.2343, it may experience a new bearish wave towards the channel’s lower boundary seen around 1.2285. Interestingly, the 50% Fibonacci retracement of the 2021-2022 downtrend is positioned in the same area. Should that floor collapse too, the sell-off may pick up steam towards the 1.2240-1.2200 territory.
In a nutshell, GBPUSD could not escape the bearish trend despite its latest recovery attempt, increasing speculation that the sell-off may soon resume. A rally above 1.2420 is needed to eliminate downside risks.
GBPUSD pivoted quickly higher to 1.2394 on the back of rising rate hike expectations in the UK following the plunge to a seven-week low of 1.2308. Technically, the pair staged another bullish correction within a tight, short-term bearish channel.
Despite the bounce in the price, the technical picture in the four-hour chart cannot guarantee a bullish continuation. The pair has yet to cross above its simple moving averages (SMAs), currently facing resistance near the channel’s upper boundary. Meanwhile, the momentum indicators followed the price higher, but the upside move was not enough for the RSI to violate its sideways trajectory above its 50 neutral mark.
In the event the bulls enter the 1.2400 area, the 50-period SMA could immediately block the way towards the 200-period SMA at 1.2480. Even higher, the pair will attempt to close above the 1.2530-1.2550 barrier in order to reach the broken support trendline from September near 1.2570.
If the price pulls below its 20-period SMA and closes beneath the nearby low of 1.2343, it may experience a new bearish wave towards the channel’s lower boundary seen around 1.2285. Interestingly, the 50% Fibonacci retracement of the 2021-2022 downtrend is positioned in the same area. Should that floor collapse too, the sell-off may pick up steam towards the 1.2240-1.2200 territory.
In a nutshell, GBPUSD could not escape the bearish trend despite its latest recovery attempt, increasing speculation that the sell-off may soon resume. A rally above 1.2420 is needed to eliminate downside risks.
Related Posts: