GBPUSD has been trading lower over the last three months with weak momentum, reaching a new four-month low of 1.2725. The risk is still to the downside as the pair remains beneath the Ichimoku cloud and the 20- and 40-day simple moving averages (SMAs). The RSI indicator is flattening below the 50 level, while the MACD oscillator is holding below its trigger and zero lines.
In the wake of more negative pressures, the market could meet support at the 50.0% Fibonacci retracement level of the up leg from 1.1957 to 1.3515 near 1.2735 ahead of the recent trough of 1.2725. A successful close below this level could see a retest of the inside swing high of 1.2580 from September 2019, before the 61.8% Fibo of 1.2550.
On the flip side, a move to the upside could see immediate resistance at the 1.2820 and 1.2870 levels, but should the market increase positive momentum above this area, the 38.2% Fibonacci of 1.2920, which coincides with the 20-day SMA, could be the next level in focus. Even higher, the 40-day SMA currently at 1.2985 could attract attention since any strong violation at this point could increase chances for further gains probably towards the 1.3070 region, taken from the peak on February 13.
In the medium-term window, the neutral-to-bearish outlook is still intact as long as the price keeps fluctuating between 1.2725 and 1.3285.
