GBPUSD is trading marginally higher over the last couple of days following the rebound from the 1.4000 strong psychological level, which holds near the 20-day simple moving average (SMA). This week, cable is paring some of the previous week’s losses and is shifting the tendency back to bullish.
Having a look at the medium-term timeframe, the pair has been developing within an ascending tendency since March 2017 after touching the 1.2100 significant level.
Technically, the momentum indicators are confirming the recent upside potential move. The RSI indicator is holding in positive territory with stronger momentum than before and is sloping to the upside, while the stochastic oscillator completed a bullish crossover within the %K and %D lines in the oversold area, suggesting strong bullish move on price.
If the price continues to recover some losses, it could move towards the 1.4245 resistance level, taken from the high on March 26. A jump above this region could open the door for the next immediate resistance near 1.4280. Furthermore, breaking the aforementioned area could drive the buyers to the 19-month high of 1.4340.
In the wake of negative pressures and a slip below the 1.4000 handle and the 20- and 40-day SMAs could endorse the scenario for a bearish correction until the 23.6% Fibonacci retracement level near 1.3800 of the upleg from 1.2100 to 1.4345. The 20 and 40 SMAs are standing around 1.4010 and 1.3965 respectively at the time of writing. Following a drop below the Fibonacci level, a test of the ascending trend line near the 1.3710 support is possible.
Overall, GBPUSD has been bullish in the medium-term, while in near-term is expected to return back to gains after the soft downward correction.
