- GBP / USD posted a nice intraday bounce of around 85 pips from levels below 1.3000.
- Positive intraday movement stalled near a three-day-old downtrend line resistance.
- The technical setup still favors bullish traders and supports the prospects for additional earnings.
The pair GBP/USD it showed some resistance below the 200 hourly simple moving average and posted a nice intraday bounce of around 85 pips from levels below the key psychological level of 1.3000. Momentum pushed the pair to new session highs, around the 1.3075 region in the past hour, although it stalled near a three-day downtrend line resistance.
Meanwhile, the technical indicators on the one-hour chart have again started to move into positive territory. In addition to this, the bullish oscillators on the daily charts / 4-hour chart now support the prospects for a further short-term appreciation move. With that said, the bulls may need to expect a sustained move past the aforementioned trend line hurdle.
A convincing advance has the potential to lift the GBP / USD above 1.3100, to test the resistance of the daily highs with which it closed last week near the 1.3140-45 region. This is closely followed by resistance marked by the 61.8% Fibonacci level of the 1.3482-1.2676 retracement, or the recent swing highs near the 1.3175 region.
Some subsequent purchases will be seen as a new trigger for bull traders and will pave the way for a move to retest the horizontal resistance at 1.3235. Momentum could extend further towards the 1.3300 level en route to the next big hurdle near the 1.3320 region.
On the other hand, immediate support is now pegged near the 1.3020 region before 1.3000 (200 hourly SMA) and 38.2% of the Fibonacci level, around the 1.2980 region. Failure to defend the aforementioned support levels will support the prospects for an extension of the recent drop and accelerate the slide towards 1.2900.
Some subsequent selling will cancel out any positive short-term bias and make the pair vulnerable. The bears could drag the pair below the 23.6% Fibonacci level, around the 1.2865 area, and 1.2800, to challenge the very important 200-day SMA, around the 1.2710-1.2705 area.
1 hour chart
Technical levels
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Credits: Forex Street
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