GBP/USD pulls back from three-month high [Video]

GBPUSD corrects lower after advance pauses.
But seems to be finding traction in the last couple of sessions.
Oscillators lose ground but remain in their positive zones.

Stefanos Oikonomidis XM

GBPUSD had been forming a profound structure of higher highs and higher lows following its break above the crucial descending trendline in early November. However, the pair’s rally paused at the three-month peak of 1.2732, with the price retracing lower towards the 200-day simple moving average (SMA).

Given that both the RSI and MACD managed to stay within their positive territories, the bulls could attempt to erase the latest pullback and propel the price towards the May peak of 1.2678. A violation of that hurdle could bring the recent rejection region of 1.2732 under examination. Failing to halt there, the pair might advance towards the June high of 1.2847.

On the flipside, should the latest slide persist, the pair could challenge the recent support of 1.2500, which lies very close to the 200-day SMA. Piercing through that floor, the price may then descend towards the December-January resistance zone of 1.2445 that could serve as support in the future. Even lower, the October resistance of 1.2336 could act as the next barrier for the bears to claim.

In brief, GBPUSD experienced a mild correction after reaching overbought conditions. Nevertheless, the pair seems to have found its footing in the last few sessions as it managed to hold above the 200-day SMA.

Author

Stefanos Oikonomidis

Stefanos joined XM as a Junior Investment Analyst in September 2021. He conducts daily market research on the currency, commodity and equity markets, from a fundamental and a technical perspective.

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