- GBP/USD faces tough resistance around 20-SMA and 61.8% Fibonacci.
- Positive momentum appears to be waning.
GBPUSD continues to consolidate after the rebound from the January low of 1.2099 ran out of steam around the 1.3000 area in mid-March. Uncertainty surrounding Trump’s tariffs is likely making it difficult for the bulls to charge ahead with confidence even as the recent UK economic data have been satisfactory.
Following the pullback, the 20-day simple moving average (SMA) initially acted as support but has now risen above the price action to cap any gains. Slightly beneath it is the 61.8% Fibonacci retracement of the September 2024-January 2025 downleg at 1.2923 and together with the 1.2875 level, they are acting as a strong support base for the pair.
The momentum indicators suggest a neutral bias in the near term, as the RSI has flatlined slightly above the 50 mark and the stochastics lack direction too.
Should GBPUSD slip below 1.2875, there’s likely to be further support just above the 1.2800 level where the 200-day SMA is slowly ascending. The 50% Fibonacci stands ready to halt steeper declines at 1.2766, while the 50-day SMA is another challenge for the bears at 1.2719. Even lower, the 100-day SMA is forming a tough support barrier together with the 38.2% Fibonacci just above 1.2600.
If, however, the bullish forces re-energize and manage to push the price above the 20-day SMA, and more importantly, above the crucial 1.3000 resistance, GBPUSD might be able to rally all the way until the 78.6% Fibonacci of 1.3148 before targeting the September 2024 peak of 1.3433, which was a two-and-a-half-year high.
All in all, GBPUSD looks set to consolidate for a while longer, but a drop below 1.2875 would increase the downside risks, endangering the medium-term uptrend, while a climb above 1.3000 would reinforce it.
