GBPUSD has held a neutral bias since late November, trading in a range between 1.3300 and 1.3550. The outlook is neutral as long as the market remains in the resistance zone between 1.3500 and the September 20 peak of 1.3656.
Near-term risk is to the upside after GBPUSD bounced off 1.3300, a level that was tested a few times in mid-December, proving to be a strong support level. If this support holds, more sideways trading is expected in the near term until prices make a sustained break above 1.3656. Support is seen at 1.3300 (50-day moving average). A drop below this support would target further support at 1.3000. Any move lower would change the short-term neutral bias to a more bearish one.
Momentum is bullish and RSI is rising. The 50-day and 200-day moving averages are positively aligned. As long as the market remains above these, there is room for further upside. In the bigger picture, GBPUSD is expected to remain steady in a broad, choppy range between 1.3000– 1.3500, as the pair consolidates after the rise from the 1.2000 area.
