GBPUSD hit a snag and is retreating from its freshly logged multi-month high of 1.3538, and is even back under the previous highs of 1.3514 and 1.3481. The falling red Tenkan-sen line is showing weakness in the positive drive, while the rising blue Kijun-sen line is backing an improving picture. Furthermore, the slight incline in the 200-day simple moving average (SMA), and the rising 50- and 100-day SMAs are protecting the positive structure.
Nonetheless, the short-term oscillators are leaning towards a deeper negative pullback in price. The MACD, in the positive region, has slid below its red signal line, while the RSI is falling in bullish territory. Moreover, the negatively charged stochastic oscillator, with a diving %K line, is promoting further negative price action.
To the downside, initial limitations may develop from the nearby 1.3285 barrier ahead of the support section of 1.3195-1.3224, which also contains the blue Kijun-sen line. Receding further, the critical zone from the 50-day SMA at 1.3132 until the cloud’s upper band – together with the 100-day SMA at 1.3079 – may prove a harder obstacle for the bears to dive under. However, should this area, which surrounds the 1.3105 border, fail to halt an extended decline under the cloud, the price may then test the 1.2854 troughs.
If cable regains strength and pushes over the red Tenkan-sen line at 1.3375, the bulls may then challenge the buffer zone of multi-month highs from 1.3481 until 1.3538. Conquering this significant ceiling, buyers may then meet the 1.3617 high from May of 2018. Propelling above this too, the climb may then aim for the 1.3710 and 1.3840 inside swing lows from March 2018.
Summarizing, GBPUSD maintains a bullish tone above the SMAs and the 1.3105 trough. A break above 1.3538 could build serious confidence in the pair, shifting all timeframes to positive.
