GBPUSD has been capped by the 200-day moving average and has been hovering around it since Monday following the 5% rally from last Thursday’s low of 1.4012. The pair has consistently met resistance at the 61.8% Fibonacci retracement level from the December to February downleg from 1.5239 to 1.3835.
The positive momentum generated by the rally is holding, with RSI comfortably above 50 and the MACD histogram rising above 0. However, prices have consistently struggled to rise significantly above the 1.47 handle, which also corresponds with the 61.8% Fibonacci level, after peaking at 1.4782 yesterday. A daily close above this level (which it has not done so since early January) is needed to strengthen the upside momentum. Further gains could see the pair meeting resistance at the 1.48 handle, followed by the 78.6% Fibonacci level at 1.4935.
A change in sentiment for GBPUSD could see prices reverse to the downside to find support around the 1.46 handle. Sharper losses could see the pair head towards the 50% Fibonacci level at around 1.4535, while below that the 50-day moving average comes in focus. A drop below the 50-day moving average would likely shift the bias to negative.
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