- GBPUSD finds strong support in 1.2480 region
- But upside momentum struggles to take off
GBPUSD has managed to hold above the 1.2500 mark this week following last week’s post-Fed tumble that pulled the pair to the lowest since May, hitting 1.2474. The slide reinforced the medium-term downtrend line as a strong resistance wall, but now the bulls face additional barriers.
Any recovery attempt would first need to overcome the 61.8% Fibonacci retracement of the November-December upleg at 1.2610 and then battle the 20-day simple moving average (SMA) at 1.2663 before cracking the descending trendline.
However, a successful break above it would strengthen the short-term bullish bias, while switching the bearish outlook in the medium term to a more neutral one. It would also clear the path towards the December peak of 1.2810, which is where the 200-day SMA is currently converging.
In the bigger picture, the bulls would ideally need to aim for the 100-day SMA at 1.2943 as well for the long-term uptrend to stand any chance of being restored.
But given the weak positive momentum, further downside cannot be ruled out in the near term. The RSI is only slightly pointing upwards and remains below 50, while the stochastic oscillator has some way to go before reaching neutral levels.
Should the bears retake control, the 1.2480 support area is likely to be tested again before attention turns to the 1.2400 handle that lies slightly below the 123.6% Fibonacci extension.
To sum up, there is a greater possibility of GBPUSD resuming its medium-term downtrend than reviving its long-term uptrend over the next few sessions.
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.