GBPUSD remains neutral in the near-term while maintaining a medium-term bullish market structure.
The pair has been pivoting around the key 1.2900 level while trading in a range since mid-April between 1.2755 and 1.3045. The market is waiting for a catalyst for the next sustained directional move.
Upside momentum could challenge the May 18 high of 1.3046. A break above this resistance level would trigger a move towards 1.3450, close to the top of a previous range (from July to September 2016).
Support lies at the bottom end of the current range near 1.2755. A deeper decline would target 1.2574 – which is the 50% Fibonacci level of the upleg from 1.2108 to 1.3046.
The broader technical picture looks bullish and the market has only retraced 23.6% of the rise from 1.2108 to 1.3046, keeping the uptrend still intact. There was a bullish crossover of the 50-day moving average with the 200-day MA. This suggests there will be relatively limited downside risk for GBPUSD in the near-term, although a flat RSI indicates that the consolidation phase will likely continue for now.
A drop below the 200-day MA and the 50% Fibonacci would negate the bullish structure from March.
