GBPUSD has been trading higher following the rebound on the seven-month low near the 1.3100 psychological level. The price is set to complete the fourth bullish day in a row, however, the 20-day simple moving average is acting as major resistance barrier for the bulls. The neutral to the bearish picture over the past month looks to last for a while longer as the technical indicators fail to have clear directional movement.
In the daily timeframe, the MACD oscillator is moving slightly above its trigger line but still holds in the negative territory. On the other hand, the %K line of the stochastic oscillator is approaching the overbought zone but is losing its strong momentum, while the %D line is following the price action.
If prices continue to head higher, resistance should come from the 23.6% Fibonacci retracement level of the downleg from 1.4375 to 1.3100, around the 1.3400 handle. This level is also holding near the 40-day SMA. A jump above these levels would strengthen the short-term bullish view and open the way towards the 1.3475 hurdle. Clearing this key level as well, the next stop could come at 1.3600.
However, should a downside reversal take form, immediate support will likely come from the seven-month low of 1.3100. A slip below this level could shift the bias back to bearish one, with the next support coming from the 1.3040 level, taken from the low on October 2017.
To sum up, GBPUSD has been developing within a downtrend since April 17 that reached the 1.4375 resistance barrier and started an aggressive bearish rollercoaster. The medium-term picture remains negative as the price is still moving below the moving averages.
