The GBP/USD market is experiencing a strong bullish uptrend, as evidenced by the recent creation of a new high. Currently, the price is being tested at the 1.2800 level, which coincides with the 61.8% Fibonacci retracement level. Moreover, the market remains above the 38.2% Fibonacci retracement level at 1.2731, indicating a strong bullish bias. Notably, the price range from 1.2827 to 1.2865 holds significant importance, as breaching these levels could lead to a more substantial bullish momentum to the upside.
Technical indicators support the bullish outlook, with the price of GBP/USD positioned above both the 200-day and 50-day moving averages. Considering the two potential scenarios that exist for this market, we can analyze the following:
Scenario 1: Bullish Continuation
If the market maintains its bullish momentum, the price may head higher to retest the 1.2803 level. Further upward movement could then propel the price towards the upper levels at 1.2812 to 1.2840, where a consolidation range might form. Should the bullishness persist, the next target would be the 50% Fibonacci retracement level at 1.2854.
Scenario 2: Bearish Retracement
Alternatively, the price might retrace lower from the current levels. In such a case, initial support can be found at the 1.2770 level, coinciding with the 61.8% Fibonacci retracement level. A successful test at this level could lead to further downside movement, targeting the 1.2747 and 1.2720 levels, with the latter acting as a major support level.
In terms of momentum, the short-term outlook indicates a downward trend for the GBP/USD pair. The Relative Strength Index (RSI) is currently within an undecided range, suggesting a lack of clear direction at the moment.
