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Technical Analysis – GBPUSD posts 2-month high before paring some gains

  • GBPUSD advances to its highest level since March 21

  • But sustains some losses as advance seems overstretched

  • Momentum indicators ease from overbought conditions

GBPUSD had been in a recovery mode following its bounce off the 2024 bottom of 1.2298, with the price violating both the 50- and 200-day simple moving averages (SMAs). Although the price posted a fresh two-month peak of 1.2799 on Tuesday, it quickly fell victim to some profit taking.

If the price manages to erase its latest losses, it could attempt to revisit its recent two-month high of 1.2799. A violation of that region could set the stage for the December 2023 high of 1.2826. Conquering this barricade, the bulls might attack the 2024 peak of 1.2892.

On the flipside, should the near-term weakness persist, the pair could initially challenge the recent support of 1.2669. Lower, the bears could target 1.2598, a region that held strong both in January and March. Failing to halt there, the price could then descend towards the February bottom of 1.2517.

Overall, even though GBPUSD surged to a fresh two-month high on Tuesday, its rally appears to be running out of juice. Nevertheless, a break below the 50-day SMA is needed for the short-term outlook to turn bearish. 

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