- GBP/USD gains momentum around 1.2688, backed by the weaker USD and the BoE’s hawkish remarks.
- The pair holds above the 50- and 100-hour EMA; the RSI indicator stands in bullish territory above 50.
- The first upside barrier is seen at 1.2724; the initial support level is located at 1.2637.
The GBP/USD pair holds positive ground during the early European session on Monday. The uptick in the pair is bolstered by the hawkish stance of the Bank of England (BoE) to remain restrictive for an extended period to bring inflation down to its target. The major pair currently trades near 1.2688, up 0.12% on the day
According to the four-hour chart, the bullish outlook of GBP/USD remains intact as the major pair holds above the 50- and 100-hour Exponential Moving Averages (EMAs). The upward momentum is reinforced by the Relative Strength Index (RSI), which stands in bullish territory above 50.
The first upside barrier of GBP/USD will emerge near a high of December 13 at 1.2724. The key hurdle to watch is the confluence of a high of December 15 and a psychological mark at the 1.2790–1.2800 zone. Further north, the upper boundary of the Bollinger Band at 1.2833 will be the additional upside filter. A break above the latter will see a rally to a high of July 28 at 1.2888.
On the other hand, the initial support level is seen near the 50-hour EMA at 1.2637. The next downside target is located near the 100-hour EMA at 1.2597. Any follow-through selling below the latter will see a drop to the lower limit of the Bollinger Band at 1.2515. The key contention level will emerge at the 1.2500 mark, representing a low of December 13 and the round mark.
GBP/USD four-hour chart
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