- GBP/USD’s break of 1.2400 could trigger a bearish resumption, exposing the 100 and 200 day EMAs at 1.2173.
- Buyers pushing GBP/USD above 1.2400 could trigger bullish momentum and test a year-old high at 1.2546.
Following the release of UK and US economic data, the GBP/USD remains in a choppy sideways trade, which has the pair still looking for direction after the last three days of uncertainty. From a technical perspective, three consecutive doji suggest that neither buyers nor sellers are committing to open new positions. Therefore, GBP/USD is trading at 1.2439 after recording a low of 1.2367, below the 20-day EMA.
GBP/USD Price Action
Friday’s session was headed lower, but since the early hours of the North American session, GBP/USD has headed higher, about to erase its previous losses. Despite GBP/USD justifying further hikes, the price action of the past few days suggests that buyers may be losing momentum. Indicators such as the Relative Strength Index (RSI) turned flat but tilted lower, heading towards neutral territory. At the same time, the Rate of Exchange (RoC) fell compared to Thursday’s price action, suggesting that the buying pressure is fading.
Therefore, the path of least resistance for GBP/USD is to the downside. GBP/USD needs to break above the 1.2400 area to resume its downtrend. Once broken, the pair could head towards the 20-day EMA at 1.2386, followed by the confluence of the April 3 low and the 50-day EMA at 1.2274/76. A break of the latter and GBP/USD could send us headlong towards the confluence of the 100 and 200 day Emas around 1.2173.
On the other hand, if GBP/USD sustains above 1.2400, it could test the April 19 cycle high at 1.2474. If buyers recover the latter value, upside risks will clear at 1.2500, followed by the year high at 1.2546.
GBP/USD Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
