GBP/USD gains traction near familiar support area

GBP/USD returned to gains after a six-day decline squeezed it to a six-month low of 1.2595. The pair rebounded near an important trendline from October 2023, and indicators like the RSI and stochastic oscillator suggest the price is likely set for an upward move from oversold territory.

Yet, buyers may not make additional moves until the price clearly crawls back above August’s base of 1.2663-1.2685. The 1.2730 bar, which overlaps with the 61.8% Fibonacci retracement of the April-September upleg, could be another hurdle before the 200-day simple moving average (SMA) and the 50% Fibonacci mark of 1.2865 come into view. If the tentative resistance line gives way at 1.2915, the bulls could accelerate toward the critical 1.3000-1.3040 constraining zone with scope to change the trend back to positive.

In the bearish scenario where the pair slips below the 1.2540-1.2580 floor, a sharp decline could occur toward 1.2400-1.2440. The 1.2300 round number, which almost triggered April’s rally, may resume its supportive role if selling pressure intensifies.

In summary, GBPUSD seems poised for a potential recovery, but a clear break above 1.2663-1.2685 is needed to confirm additional gains.