GBPUSD closed Monday’s session with marginal gains around 1.2700 after receiving strong protection from the 1.2680 base for the third consecutive trading day.
Bulls tried to increase the price on Tuesday, but the technical outlook stayed weak, casting doubt on whether there was enough strength for an upsurge. The pair seems to be trapped below a tough resistance trendline at 1.2740 and beneath the red Tenkan-sen line. Moreover, the MACD has slid below its red signal line and the RSI, although above its 50 neutral mark, has slipped below its previous high, reflecting weakening buying interest.
In trend signals, the price has paused its latest bearish correction near May’s highs and comfortably above its simple moving averages (SMAs), retaining a bullish structure in the medium and long-term picture. That said, the price seems to be hovering within a descending triangle in the four-hour chart, which is usually a bearish pattern.
A decisive extension above 1.2740 would reduce negative risks, prompting a rally towards the crucial 1.2820-1.2880 constraining zone, where the support-turned-resistance trendline from the 2022 record low is positioned. Beyond that wall, the pair could spike towards the 1.3000 psychological mark, which overlaps with the 61.8% Fibonacci retracement of the 2021-2022 downtrend. If the latter gives way too, upside pressures could intensify towards the spring 2022 barrier of 1.3080-1.3150.
Otherwise, a pullback below 1.2740 could bring the 1.2680 floor back under examination. If the bears claim that region, the 20-day SMA may attempt to block the way down to 1.2560-1.2530. The 50-day SMA and the short-term ascending trendline from May are making this territory important to watch. Failure to hold above that bar could squeeze the price to 1.2430.
All in all, despite the latest soft upturn in GBPUSD, the pair is still trading within a caution area. A sustainable extension above 1.2740 is required to eliminate downside risks, whereas a drop below 1.2680 is expected to worsen market sentiment.
