GBPUSD has been consolidating between the 20- and 200-day simple moving averages (SMAs) for more than a week, but the pair is now looking ready for a bullish breakout above the latter.
Although somewhat flattish, the market structure remains positive, with the price printing higher highs and higher lows following the rebound from the 35-year low of 1.1409. The momentum indicators are also in favor of the bulls as the RSI is rising comfortably above its 50 neutral mark and the MACD is regaining strength above its red signal line.
Should the pair surpass the 200-day SMA, closing above the 1.2750 barrier too, traders could seek fresh highs near the line (1.2940) that has been connecting all the peaks registered from April onwards. Clearing that obstacle, the way would open towards the 1.3200 hurdle, a break of which could see the retest of the 1.3330 mark – a strong resistance area during 2019.
In the event the 200-day SMA adds downside pressure once again, the focus will shift to the 20-day SMA at 1.2514. Not far below, a tentative ascending trendline may attract special attention if it manages to hold the price above the swing low of 1.2250, keeping the uptrend in place. If sellers persist, May’s trough of 1.2074 could be the next target.
Looking at the six-month picture, the outlook is neutral and only a rally above 1.3200 could upgrade it to positive.
Summarizing, GBPUSD could trace new highs if it successfully overcomes the 1.2750 barrier, while a drop below the ascending trendline could reduce confidence in the four-month old uptrend.
