GBPUSD has been marching higher since September when the pair recorded an all-time low of 1.0324. However, in the short-term, the price appears to be stuck in a tight range around the 200-day simple moving average (SMA), with the narrowing Bollinger bands reinforcing the case of a potential impending spike.
The short-term oscillators currently suggest that near-term risks are tilted to the downside. Specifically, the RSI slid below its 50-neutral mark, while the stochastic oscillator is set to post a bearish cross.
If the negative momentum strengthens and the price extends its pullback below the 200-day SMA, immediate support could be met at the 1.1904 congested region, which includes the 50-day SMA and the lower Bollinger band. Sliding beneath that floor, the October resistance of 1.1645 may curb further declines. Failing to halt there, the 1.1260 barrier could prove to be a tough one for the price to overcome.
To the upside, bullish actions could propel the pair towards the recent resistance region of 1.2241.Violating this zone, the price might retest 1.2445, which rejected the pair’s medium-term rebound. Even higher, the bulls could aim for the May peak of 1.2666.
Overall, GBPUSD is experiencing a moderate downside correction since its uptrend encountered significant resistance. Therefore, a clear dive beneath the 200-day SMA may accelerate the downfall.
