GBPUSD has maintained a neutral bias during the past month after declining from the high of 1.3656. Strong support is provided at the key 1.3000 level.
Near-term risk is tilted to the downside as GBPUSD continues to trade below the 50% Fibonacci retracement level of the upleg from 1.2773 to 1.3656. This level at 1.3215 will act as immediate resistance. A move above the 38.2% Fibonacci (top of current range) at 1.3318 is needed to weaken downside pressure and shift the market’s focus to the upside for a re-test of the 1.3656 high. From here the market would see a resumption of the longer-term uptrend.
A daily closing below 1.3000 would bring more softness for GBPUSD to shift it out of neutral to a bearish phase to target the 1.2773 low.
In the meantime, the market is expected to continue to trade in a range in the short-term, and likely at the lower end of the one-month range. The oscillators reflect a lack of clear direction. Both RSI and MACD are currently neutral.
