- GBPUSD corrects lower after hitting resistance at 1.2800
- Technical signals weaken, but key support levels are underneath
GBPUSD rose exponentially in the aftermath of the FOMC policy meeting, but the ascending line drawn from the December 2023 low interrupted the rally near the 1.2800 level and forced a new bearish move on Thursday before the BoE policy announcement due at 12:00 GMT.
On the four-hour chart, the stochastic oscillator appears to be losing momentum above its overbought level of 80, while the RSI is also decelerating after encountering a previous resistance zone, indicating a possible period of consolidation or a potential downturn.
The 50-period simple moving average (SMA) and the 38.2% Fibonacci of 1.2753 are now under the spotlight on the downside. Additional losses from there could head for the 20-period SMA and the 23.6% Fibonacci of 1.2720, a break of which could press the price into the 1.2666-1.2680 region.This is where the 200-period SMA and the support trendline from February are placed.
Otherwise, a bounce above the 1.2800 round level and the 61.8% Fibonacci mark could prompt a continuation towards the 1.2850 resistance. Running higher, the bulls could challenge the 1.2900 psychological number before making a speedy move towards the 1.2960-1.3000 constraining zone taken from July 2023.
In a nutshell, GBPUSD has entered a cautious zone as a result of the Fed boost. A decisive rebound above 1.2800 is now needed to shift the risk back to the upside.
