GBPUSD charted a 30-month low just above the pandemic low of 1.1408 on Monday before turning green for the first time after a week.
The price managed to rise as high as 1.1600 earlier today and although some recovery could take place in the near term given the oversold conditions in the market as reflected by the RSI and the stochastics, it is too early to hope for a meaningful rally. The indicators are still stuck in the bearish area, while the pair itself still has some obstacles to overcome before it decides to exit the 2022 bearish channel.
The 1.1620 region, where the price met some restrictions lately, could add some pressure ahead of the 1.1758 barrier in case of a move higher. Then, a decisive close above the 20-day simple moving average (SMA) and the 1.1830 resistance could be the key for an advance towards the 50-day SMA at 1.1950 and the channel’s upper band seen around the 1.2000 crucial boundary. A successful penetration higher and beyond 1.2085 could confirm a direct flight towards the August peak of 1.2292.
If upside pressures fizzle immediately, the bears may push again towards the pandemic low of 1.1408, a break of which would threaten an outlook deterioration below the channel’s lower line seen within the 1.1320 – 1.1300 area. The 1.1200 mark could next come on the radar.
Summarizing, GBPUSD could recoup some lost ground in the coming sessions, though any potential upside reversal will be under scrutiny as downside risks remain in play.
