GBP/USD traded lower on Wednesday, but today, it hit support near the upside support line drawn from the low of December 20th, and then, it rebounded. Overall, the price structure remains of higher highs and higher lows above that line, and thus, we will maintain a positive stance.
We believe that the bulls could soon aim for the 1.3605 barrier, marked by the high of November 9th, the break of which would confirm a forthcoming higher high and perhaps set the stage for advances towards the high of November 4th, at 1.3695. If the bulls are not willing to stop there, we may see them climbing towards the 1.3800 territory, which provided decent resistance between October 28th and 29th.
Looking at our short-term oscillators, we see that the RSI rebounded from near 50 and, but ticked down again, while the MACD, although positive, lies below its trigger line and points down. Although both indicators detect upside speed, they also suggest a slowdown in moment. Therefore, we would prefer to wait for a break above 1.3605 before getting more confident on a trend continuation.
We will start examining the case of a short-term reversal if we see a clear dip below 1.3458. This could confirm the break below the aforementioned upside support line and could initially aim for the 1.3408 barrier, which is defined as a support by the low of December 29th. Slightly lower lies the 1.3375 zone, the break of which could carry larger bearish implications, perhaps paving the way towards the 1.3275 barrier.
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