GBPUSD finished Monday’s session slightly above the 200-day simple moving average (SMA) following last week’s roller coaster which put the strong rebound from 35-year lows back into life.
Whether the pair could push for more gains depends now on the 1.2760 resistance which is currently under examination. Should it give way, the rally could get more legs towards the 1.2850 barrier, while higher, there is a tougher wall standing around 1.2975 which the bulls need to pull down in order to accelerate towards the 1.3115-1.3200 restrictive zone.
Otherwise, if the price retreats below 1.2645, confirming the overbought signals the RSI and the stochastics are currently sending, the next key support could emerge around 1.2480. Beneath that, the ascending trendline stretched from the March troughs, and the 20- and 50-day SMAs (around 1.2387) may attempt to block steeper downside corrections towards the bottom of the range; first near 1.2160 and then closer to 1.2074.
Meanwhile, in the medium-term picture, the pair could abandon its negative direction if the bulls manage to post a higher high above 1.2975.
In brief, GBPUSD is testing a key resistance around 1.2760, a break of which could add more fuel to the rally. Yet, some caution needs to be warranted in the short-term as the market is trading within overbought borders.
