- GBPUSD tries to record another green candle
- The strong move from the October lows continues undaunted
- Momentum indicators remain favourable for the current move
GBPUSD is trying to register its fourth consecutive green candle as the strong upmove from the October lows continues after GBPUSD managed to surpass the resistance set by the 50- and 200- simple moving averages (SMAs). The bulls’ appetite appears to be undeterred, especially as the convergence of the aforementioned SMAs is potentially opening the door to another sizeable move.
Momentum indicators support the current rally. The RSI is trading at its highest level since mid-July 2023, and the Average Directional Movement Index (ADX) is steadily edging higher, above its threshold and thus signaling the presence of a decent bullish trend in the market. More interestingly, the stochastic oscillator is hovering at the upper part of its overbought territory (OB) and battling with its moving average. While it can stay there for a while, the current move could also be seen as an early exhaustion signal.
Should the bulls remain confident, they could try to stage a move towards the 61.8% Fibonacci retracement of the June 1, 2021 – September 26, 2022 downtrend at 1.2750. If successful in overcoming this level, the path then looks clear until the October 21, 2019 high at 1.3011. Even higher, the December 8, 2022 low at 1.3160 appears to be a strong resistance level.
On the flip side, the bears are trying to regain market control and appear keen to push GBPUSD back below the 1.2461-1.2482 area that is defined by the 50- and 200-day SMAs. They could then test the support set by the January 3, 2019 low at 1.2393, a tad above the busier 1.2268-1.2287 range, which is populated by the 50-day SMA and the 50% Fibonacci retracement level.
To conclude, GBPUSD bulls remain in control of the market but their hard-earned gains could be under threat if the stochastic oscillator decides to edge below both its moving average and OB territory.
. The bulls' appetite appears to be undeterred, especially as the convergence of the aforementioned SMAs is potentially opening the door to another sizeable move. ){kind=link}