GBPUSD continues to rise above the Ichimoku cloud and the short-term SMAs, remaining near the six-week high of 1.2770, achieved earlier today. According to the RSI, positive momentum could push for further gains in the short-term as the indicator picks up steam above its 50 level. However, the MACD is flattening near its trigger line and negative corrections cannot be excluded.
In the positive scenario, where the price continues to expand above today’s high of 1.2770, a new top could be formed around 1.2815, taken from the high on June 10. A strong rally above these hurdles could add optimism to drive the market towards the 1.3200 psychological mark, identified on March 9.
A reversal to the downside could stall at the 23.6% Fibonacci retracement level of the up leg from 1.2550 to 1.2770 at 1.2647, which coincides with the 40-period SMA in the 4-hour chart and the 1.2640 support. Further below, the 38.2% Fibonacci of 1.2570 could also provide support, followed by the 50.0% Fibo of 1.2511, as the pair was unable to fall significantly under this line in the last two weeks. Any violation at this point could potentially trigger further sell-off in the market, probably leading the price down to 1.2486.
Regarding the short-term picture, the bullish outlook has strengthened as the index continues to move higher; a dive below 1.2511 could shift the sentiment into a neutral one.
