Technical Analysis – GBPUSD turns bullish in short term after dramatic slump
GBPUSD has reversed back up after finding strong support at the 28-month low of 1.1760. The pair is advancing above the 20-day simple moving average (SMA) and the next obstacle to surpass is the medium-term descending trend line.
The momentum indicators are pointing to a positive bias in the short term with the RSI just above 50 and the MACD is holding above its trigger line in the negative region.
A move to the upside could see immediate resistance at the 40-day SMA at 1.2150 but should the market increase positive momentum above this area, the 23.6% Fibonacci retracement level of the down leg from 1.3640 to 1.1760 at 1.2200 could be the next level in focus. A stronger area, though, could be found at the 1.2340-1.2455 since any violation of this point could increase chances for further gains probably towards the 38.2% Fibonacci of 1.2470.
In the wake of negative pressures, the market could meet immediate support at the 20-day SMA at 1.1990 before it heads lower to the 1.1890 support. A successful close below this level could see a retest of the previous low of 1.1760, while in case of steeper declines, the pair could breach this trough, diving to the 1.1410 barrier, registered in March 2020.In the medium-term, the outlook remains negative since prices hold below the falling trend line; however, in the short-term timeframe, the market is positive.
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