- This week, GBP/USD rebounded from key support levels and rose strongly.
- However, resistance at two major moving averages prevented the upward trend.
- A clear breakout of this resistance barrier would be needed for a rally to the range high to be confirmed.
GBP/USD has just rebounded from the bottom of a medium-term consolidation range after forming a bullish tweezers-bottom Japanese candlestick pattern.
The pair rallied strongly on Wednesday and Thursday, but then hit stubborn resistance at the intersection of two major moving averages, the 50-day simple moving average in red and the 100-day simple moving average (SMA) in blue. , stalled.
British Pound vs. US Dollar: Daily Chart
The pair formed a bearish shooting star candlestick pattern on Thursday and is currently trading just below it in the 1.2630s.
This price is likely to hold once again, given the solid lower bound of the 1.2550 support, which has been shown to be able to support the price at least three times since November 2023, and the pair is once again on the market. It could be the beginning of an inward ascent. range.
However, the Moving Average Convergence/Divergence (MACD) indicator is a particularly useful tool for identifying turning points in range markets, but it has not yet crossed the signal line to provide a buy signal.
The 50 and 100 SMAs also still provide strong resistance above the price and ideally should be broken decisively before adopting a more bullish outlook.
To confirm further upside, we need a decisive break above two SMAs, meaning a long green candle that breaks through the resistance and closes near the high, or three green candles that break through the level. .
The March 21 high of 1.2804 could be the target of such a revolution.
Alternatively, a decisive break below the range low of 1.2550 could be volatile, as when support that has been retested several times is finally broken, it usually collapses in dramatic fashion. This will lead to a significant decline.
