GBPUSD has been neutral since last week following a rise from near the 1.3000 level to a high of 1.3549 hit on December 1. The market is consolidating these recent gains and price action remains above the previous two months’ range. The 50 and 200- day moving averages are positively aligned. However, near-term risk is tilted to the downside, as RSI has been falling.
There is immediate support at the 38.2% Fibonacci retracement level (1.3320) of the upleg from 1.2773 to 1.3656. A daily closing below this would increase near-term pressure to the downside for a move towards the 50% Fibonacci (1.3216) and 61.8% Fibonacci (1.3112). From here the key psychological 1.3000 level comes into view but it is considered to be a strong support area. GBPUSD has been trading above this level since early September.
Overall the market has been searching for direction since reaching the 1.3656 peak on September 20. This was the highest level since June 2016. Resistance at 1.3445 needs to be cleared to see a re-test of 1.3656 and then a resumption of the prior uptrend.
As long as the market can stay above 1.3000 and above the 200-day moving average, the big picture remains positive and the longer-term uptrend that has been taking place since early this year is still in progress.
