GBP/USD traded higher yesterday and today, after it hit support slightly above the psychological zone of 1.2500. That said, the rate was stopped once again near the 1.2700 zone, as it has been the case on Friday. Last week’s rally may have turned the near-term picture to a more positive one, but we prefer to wait for a decisive break above 1.2700 before we get confident on more bullish extensions.
Such a break would confirm a forthcoming higher high on the 4-hour chart and may initially pave the way towards the 1.2765 area, which provided decent resistance back in June. If the bulls are not willing to hit the brakes near that zone, then we may see them pushing towards our next possible resistance area, at around 1.2815, which is marked by the high of May 21st.
Taking a look at our short-term oscillators though, we see the case of another corrective retreat before the bulls decide to shoot again, perhaps for the rate to challenge territories slightly above 1.2500 again. The RSI ticked down from near its 70 line, while the MACD, although positive, lies below its trigger line, pointing sideways.
On the downside, a dip below 1.2500 could signal that the bulls have abandoned the field for a while longer, thereby allowing a larger negative correction. The slide may then extend towards the 1.2415 zone, near Friday’s low and defined by the inside swing high of October 3rd, the break of which could open the path towards our next support zone, at around 1.2340, marked by the highs of October 6th and 7th.
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