GBPUSD opened the week on a neutral note, consolidating its bearish correction from a one-year high within the 1.2300 zone.
According to the technical picture, the sideways move could be temporary within the bearish wave. The downfall below the 20- and 50-day simple moving averages (SMAs) and beneath the former 1.2445 ceiling could motivate more selling in the short term. The negative trajectory in the RSI and the MACD is another sign that the sell-off has not bottomed out yet.
An upside correction, however, cannot be ruled out either as the RSI has reached its previous support area, while the stochastic oscillator has been flattening within the oversold region for two weeks now.
If selling pressures resume, the 50% Fibonacci retracement of the 2021-2022 downtrend could provide a footing around 1.2285, preventing a continuation towards the 1.2200 mark. A steeper decline could stabilize around the 1.2130 constraining zone, while lower, the door would open for the 1.2000 number and the 200-day SMA.
On the upside, traders will likely wait for a bounce back above 1.2370-1.2400 before they target the 20-day SMA at 1.2473. A successful move above the latter could clear the way towards the tough resistance trendline at 1.2595, which has been capping bullish actions since May 2021. If buying interest persists, the pair may attempt to climb above May’s peak of 1.2678 and continue towards 1.2800, where it paused several times during 2019.
All in all, GBPUSD keeps facing a blurry short-term outlook. The next bearish round could start below 1.2285.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD retreats toward 1.1100 on modest USD recovery
EUR/USD struggles to hold its ground and retreats toward 1.1100 in the second half of the day on Tuesday. Upbeat Retail Sales data and the uncertainty surrounding the Fed's upcoming interest rate decision helps the US Dollar recovery and weighs on the pair.
GBP/USD pulls away from multi-day highs, trades below 1.3200
GBP/USD stays on the back foot and trades below 1.3200 in the second half of the day on Tuesday. The cautious market stance ahead of the Federal Reserve's policy meeting supports the USD and limits the pair's upside.
Gold under mild pressure near $2,560
Gold stays under modest bearish pressure on Tuesday and trades below $2,580. The benchmark 10-year US Treasury bond yield holds steady above 3.6% ahead of the Fed's policy announcements on Wednesday, making it difficult for XAU/USD to gather bullish momentum.
Why the Fed is set to cut interest rates and what does that mean Premium
The Fed is expected to cut interest rates on Wednesday. This is a crucial event as it directly affects families and businesses in the United States (US) – but also abroad given the importance of the US as the world’s largest economy.
Bitcoin approaches its $56,000 support level
Bitcoin is approaching a crucial daily support level of $56,000, hinting at a possible recovery. Ethereum faced rejection from the resistance level, suggesting a downward trend with weak momentum. In contrast, Ripple has bounced above the 100-day EMA, indicating a continued upward trend.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.