GBPUSD has been underperforming in the past few sessions, breaking back below the 61.8% Fibonacci retracement level of the down leg from 1.3200 to 1.1410 at 1.2523. When looking at the bigger picture on the daily timeframe, the pair is trendless as the latest rebound from the 35-year low surpassed 1.2170.
In technical indicators, the RSI has reversed south to meet its 50 neutral level, while the MACD oscillator is hovering above zero line with weak momentum. Despite these discouraging signals, the 20- and 40-day simple moving averages (SMAs) are ready for a bullish crossover in the next few periods.
If price action remains above the SMAs, there is scope to hit the immediate resistance of 1.2523, which is the 61.8% Fibo. Clearing this key level, the market could see additional gains towards the 1.2650 – 1.2710 area. Rising above it, the price could revisit the 76.4% Fibo of 1.2785 and then from there it could clearly resume its short-term uptrend, with traders looking next at the1.3200 round number.
However, if the price fails to hold above SMAs, then the focus could turn towards the 50.0% Fibo of 1.2307, which coincides with the upper surface of the Ichimoku cloud. Below this region, the 1.2170 support and the 38.2% Fibo of 1.2100 could trigger stronger downside pressures if violated, pushing the price towards the 23.6% Fibo of 1.135.
Overall, GBPUSD has been neutral since mid-March, though, the shorter-term moving averages are suggesting that a bullish structure may resume.
