GBP/USD outlook: Slight bullish bias above 200-DMA but thin daily cloud is still significant obstacle

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable extends recovery from 1.2540 double bottom (Apr 1 / 2 lows) and pressuring significant barrier at 1.2674 (daily cloud top / Fibo 38.2% of 1.2893/1.2539), as bulls regained traction after a false break below pivotal 200DMA support (1.2586).

Near-term action is expected to keep slight bullish bias while holding above 200DMA, though sustained break above 1.2674 pivot is needed to confirm fresh bullish signal, after thin daily cloud capped a number of attempts higher.

Daily studies lack clear direction signal as MA’s are in mixed setup, RSI in sideways mode and holding in a neutral zone, while 14-d momentum is heading north but still in the negative territory.

Weaker dollar continues to underpin pound, but possibility of recovery stall on repeated failure to break through daily cloud, which would keep the downside at risk, should not be ignored.

Res: 1.2674; 1.2716; 1.2758; 1.2803.
Sup: 1.2638; 1.2586; 1.2539; 1.2518.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2778
2. R2 1.2717
3. R1 1.2685
PP 1.2624
1. S1 1.2591
2. S2 1.253
3. S3 1.2498

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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