GBP/USD Price Analysis: Cable prods three-day downtrend above 1.2400, further rise appears difficult
- GBP/USD stays defensive after three-day losing streak, rebounds of late.
- Pound Sterling’s recovery from fortnight-old support line, improving oscillators lure buyers.
- 200-SMA, one-month-long horizontal resistance area challenge Cable bulls.
GBP/USD licks its wounds near 1.2425 during early Wednesday morning in Asia, after declining in the last three consecutive days. In doing so, the Cable pair rebounds from a two-week-old ascending support line to consolidate the weekly loss, after snapping a three-week downtrend in the last.
That said, the steady RSI (14) line joins the receding bearish bias of the MACD signals to back the latest run-up in the Pound Sterling price.
However, the 200-bar SMA level of 1.2475 by the press time challenges GBP/USD bulls.
Even if the quote manages to remain firmer past the key SMA, a horizontal area comprising multiple tops marked since early May, close to 1.2540-45, quickly followed by the 1.2550 psychological level, will act as an extra filter towards the north.
Should the GBP/USD buyers manage to cross the 1.2550 hurdle, the 1.2600 round figure and the previous monthly high of 1.2680 can lure them.
Meanwhile, the GBP/USD pair sellers need validation from the aforementioned support line, close to 1.2400 at the latest. Following that, a quick fall to May’s bottom of 1.2308 can’t be ruled out.
Though, multiple levels marked during February and March highlight 1.2300-2270 as a tough nut to crack for the Pound Sterling sellers to break afterward.
Overall, GBP/USD is likely to recover but the upside room appears limited.
GBP/USD: Four-hour chart
Trend: Limited upside expected