GBPUSD is marking a negative day after its four-day gradual bull run met resistance near the 1.2653 zone, which is marginally below the low from September 2020.
The short-term bias is viewed as neutral as the RSI is diminishing towards its 50 neutral mark after barely peeking above it, while the MACD has yet to enter the positive territory despite increasing its distance well above its red signal line. The Stochastics are losing steam, but they haven’t exited the overbought territory yet.
The 1.2580 constraining area, which is currently in action, could postpone any bearish cycles. If not, the price may tumble towards the 20-day simple moving average (SMA) at 1.2443, while deeper sellers may seek a drop below the 61.8% Fibonacci retracement of the 2020 rally at 1.2312 in order to gain access to the two-year low of 1.2154.
On the upside, a clear close above 1.2653 could prompt an extension towards the 50-day SMA at 1.2740. Notably, the bottom line of the broken bearish channel is within breathing distance and near the 50% Fibonacci of 1.2828. Hence, a successful advance above the latter might be a prerequisite for an advance straight to 1.3000.
In the big picture, the bearish outlook is well preserved and that may not change unless the price accelerates beyond 1.3300.
In short, GBPUSD is not out of the woods despite its recent advance off a two-year low. A close above 1.2653 or below 1.2580 will probably raise volatility in the market accordingly.
