GBPUSD has been attempting a strong rebound after finding its feet at the all-time low of 1.0324 in late September. Even though the pair managed to cross above the crucial 200-day simple moving average (SMA), its advance has come to a halt ahead of the crucial US and UK inflation prints later this week.
The short-term oscillators are currently indicating a bullish near-term tone. Specifically, the RSI is hovering above its 50-neutral mark, while the stochastic oscillator is ascending after posting a bullish cross.
To the upside, bullish actions could propel the price towards the recent resistance of 1.2343. Piercing through this region, the pair could challenge the May peak of 1.2666. Even higher, the 1.3000 psychological mark, which has previously acted as support, could prove to be a tough resistance region.
Alternatively, should the positive momentum fade and the price reverse downwards, initial support could be met at 1.2290, which overlaps with the 200-day SMA. Sliding beneath that floor, the bears might target 1.1904 before the spotlight turns to the October resistance of 1.1645. A violation of the latter could open the door for the 1.1260 hurdle.
Overall, GBPUSD currently appears to be in a consolidation mode ahead of the crucial CPI reports that could provide fresh directional impetus. Therefore, a break above the 1.2343 ceiling would most likely signal the continuation of the pair’s recovery, while a dive beneath the 200-day SMA may trigger a downside correction.
