GBPUSD rallied early on Tuesday
Updated
GBP/USD rallied early on Tuesday, briefly reaching its highest point since March 21, but gains were short-lived as sellers quickly pushed the pair down from the psychological 1.2800 level, driving it towards 1.2755. If this ceiling holds in the near term, bulls may start bailing, creating the right conditions for a move toward 1.2700. Further weakness could shift focus to 1.2635.
Conversely, if buyers manage to reclaim dominance in the coming days and take out resistance at 1.2800, the upward momentum could intensify, propelling GBP/USD towards 1.2895 – the March peak. While overcoming this ceiling might be difficult, it is still feasible. On that note, upside clearance of this barrier could result in a rally towards the 1.3000 handle.
Conversely, if buyers manage to reclaim dominance in the coming days and take out resistance at 1.2800, the upward momentum could intensify, propelling GBP/USD towards 1.2895 – the March peak. While overcoming this ceiling might be difficult, it is still feasible. On that note, upside clearance of this barrier could result in a rally towards the 1.3000 handle.
Comment
From a technical perspective, GBP/USD is receiving significant support around 1.2670, corresponding to the 50 EMA and close to the 38.2% Fibonacci retracement threshold of the uptrend from April. Further down will be the 1.2600 area, corresponding with the 200 EMA and the 50% Fibonacci retracement level.Comment
Since touching the support area of 1.2600, corresponding to the 38.2% Fibonacci threshold calculated based on the increase from April, GBP/USD has continuously increased to near the peak of June, and at the same time entered the strong resistance area of 1.2800-1.2900. Therefore, the increased selling pressure is quite understandable.Comment
Although the monetary policy differences between the US Federal Reserve (Fed) and the Bank of England (BoE) are still the main factor creating fluctuations in GBP/USD, the return of the USD on a large scale due to risk aversion has ruined the "party" of the British pound.
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