Technical Analysis – GBPUSD tumbles after touching 3-month high

Melina Deltas, XM Investment Research Desk

GBPUSD has been in an ascending move after the rebound on the 1.2250 trough, touching a new three-month high of 1.2670. The price is currently testing the 20-day simple moving average (SMA), while the RSI indicator is pointing slightly down near the 50 level. Also, the MACD is losing momentum beneath its trigger line but it still hovering above the zero line.

An extension of the downside movement could hit the 50.0% Fibonacci retracement level of the up leg from 1.2815 to 1.2250 at 1.2530, which overlaps with the 40-day SMA. Slightly below this line, the 1.2507 support could be a strong level for the bears ahead of the 38.2% Fibonacci of 1.2465.

On the other hand, a climb above the 1.2598 level, that being the 61.8% Fibonacci could send the market towards the 1.2670 – 1.2690 area. Even higher, the pair could meet the 1.2815 barrier, taken from the peak on June 10.

In brief, GBPUSD is in ascending mode in the very short-term timeframe and neutral in the bigger picture.