GBPUSD recently logged a 31½-month high of 1.3623 before gapping yesterday below a section of peaks that previously were providing some upside resistance. The aggressive pullback bounced for a second time off the 50-period simple moving average (SMA) and once again returned the pair back above the Ichimoku lines. The price is currently resting above the flattening Ichimoku lines, while the climbing SMAs are defending the advancing picture.
The short-term oscillators are reflecting the recent dwindling in the pair. The MACD, in the positive region, is holding above its red trigger line for now, while the fading RSI is nearing its 50 threshold. Furthermore, the stochastic oscillator has turned bearish with its %K and %D lines promoting additional negative moves.
Nevertheless, if buyers manage to sustain their powerful traction off the 50-period SMA and clear the 1.3481-1.3538 zone, they could quickly revisit the multi-year peak of 1.3623. Overcoming this top the pair may revive the ascent, aiming for the 1.3710 barrier ahead of the resistance region of 1.3840-1.3890, from March of 2018. Should further gains unfold, the pair may then stretch for the psychological number of 1.4000.
Otherwise, if sellers steer far below the Ichimoku lines at 1.3379, the 50-period SMA at 1.3225 and the adjacent 1.3186 low may provide initial constraints to downside moves. Next, the Ichimoku cloud’s upper surface and the nearby support section of 1.3105-1.3134, which also contains the 100-period SMA, could attempt to dismiss additional losses. However, from here if the price sinks deeper under the floor of the cloud at 1.3028, the pair may target the key troughs at 1.2854 before challenging the 200-period SMA at 1.2793.
Overall, GBPUSD is safeguarding its positive picture above the SMAs and the 1.3186 low. A push over the 1.3481-1.3538 resistance zone may re-establish confidence in the pair.
