The price of GBP/USD is currently undergoing a strong-term pullback within a range-bound market, with a recent test of support levels around 1.2690. Despite this pullback, the price remains above both the 200-day and 50-day moving averages, although it has touched the 50-day MA, indicating potential support in that area.
In Scenario 1, there is a possibility of further upward movement in price, with the 1.2711 level serving as a potential target. If bullish momentum continues, the upper levels between 1.2720 and 1.2723 may be reached. Beyond that, additional resistance can be observed at levels ranging from 1.2727 to 1.2734. The key resistance zone to monitor lies at 1.2741 to 1.2756, as a break above that range could signify further bullish strength.
Alternatively, Scenario 2 suggests the potential for a decline in price from current levels. Initial support may be found at the 1.2686 level, which aligns with the 25% Fibonacci retracement level and is in close proximity to the current price of 1.2695. If this level fails to hold, further downside movement could lead to tests of the 1.2682 and 1.2663 levels. Notably, the 1.2656 level holds significant importance as a key support level.
The short-term momentum for GBP/USD is currently tilted towards the downside, signaling bearish sentiment. The Relative Strength Index (RSI) is in an undecided range, further emphasizing the lack of a clear direction in the market.
Overall, GBP/USD is currently trading within a range, oscillating between the levels of 1.2756 and 1.2646. It will be crucial to closely monitor price action and observe how the market reacts at these levels, as they hold the potential to influence the future trajectory of the pair.
Key levels to watch are 1.2690,1.2682,1.2672,1.2665,1.2705,1.2711,1.2716,1.2727
