GBPUSD attempted to recover some lost ground on Monday after its pullback from the 2021 descending trendline stalled near 1.2442. Despite its latest bullish efforts, the pair could not overcome its 20-day simple moving average (SMA), which has been acting as resistance over the past three days around 1.2520.
Given the falling MACD and the negative slope in the RSI, which is set to cross below its 50 neutral mark, the risk is tilted to the downside rather than the upside. That said, the pair is currently well supported around the ascending trendline drawn from September’s record low at 1.2445. If the bears breach that floor, the 50-day SMA could immediately come to the rescue at 1.2388. Otherwise, the decline could continue towards the 50% Fibonacci retracement of the 2021-2022 downtrend at 1.2285 and the 1.2200 round-level. Another failure here could initially test the 1.2130 barrier before squeezing the price down to the 1.2000 psychological mark and the 200-day SMA at 1.1960.
In the bullish scenario, where the price closes above the 20-day SMA at 1.2520, the spotlight will fall again on the crucial long-term descending trendline seen around 1.2635. Should that ceiling crack this time, with the pair extending its uptrend above the one-year high of 1.2678, the uptrend may stretch up to the 1.2800-1.2860 constraining zone. The 61.8% Fibonacci mark of 1.3000 could be the next destination, while a steeper increase could reach the short-term resistance line from March at 1.3140.
Summing up, GBPUSD seems to be preparing for a new bearish wave following another rejection near a long-term resistance trendline. Yet, the pair may have another opportunity for a rebound, unless the price slips below the upward-sloping trendline at 1.2445 and the 50-day SMA.Â
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