GBP/USD Trading Update
GBP/USD has bounced back from its earlier losses and is currently sitting around 1.3680 during European trading hours on Wednesday. Looking at the daily chart, there’s a clear bullish enthusiasm as the pair continues within an upward channel pattern.
The 14-day Relative Strength Index (RSI), which indicates momentum, is at 55.94, comfortably above 50. This suggests strong bullish momentum without signaling that the market is overbought. The short-term outlook seems positive, especially since the 9-day exponential moving average (EMA) is above the 50-day EMA, which is at 1.3518. Overall, prices are exceeding both EMAs, and the 50-day EMA is on the rise, reinforcing a positive medium-term outlook.
If the upward trend continues, we could see a target reaching the resistance at 1.3869, which is the highest level since September 2021, reached on January 27. Following that, we might aim for the ascending channel’s peak around 1.4110. If we manage to break above this channel, it might lead to another rally toward 1.4248, which hasn’t been seen since April 2018.
As for potential setbacks, the immediate support level is the 9-day EMA at 1.3652. If the market weakens further, a pullback could bring us to support near the lower end of the ascending channel around 1.3570. Following that, we have the 50-day EMA at 1.3518. A stronger decline could increase bearish pressure on the GBP/USD pair and test support around 1.3350.
