GBP/USD consolidates as pullback fades
2023.08.01 07:48
GBPUSD has been in a prolonged uptrend since October 2022, storming to a fresh 15-month high of 1.3141 on July 14. Since then, the pair has been experiencing a mild downside correction, which seems to be faltering as the price has been directionless in the past few daily sessions.
However, the momentum indicators suggest that bearish forces continue to hold the upper hand. Specifically, the MACD remains below its red signal line in the positive zone, while the RSI is hovering slightly below the 50-neutral mark after a series of failed attempts to claim it.
Should bearish pressures persist, the price could face the recent support of 1.2762 ahead of the upward sloping trendline that connects higher lows since October 2022. Sliding beneath the latter, the pair might descend towards the June support of 1.2590 before 1.2445 gets tested. Further declines could then cease at the May bottom of 1.2307, which overlaps with the 200-day simple moving average (SMA).
On the flipside, should the latest correction prove to be short-lived, the bulls could propel the price back higher towards the 1.3000 psychological mark. A violation of that zone could pave the way for the 15-month peak of 1.3141. If that barricade fails, the pair could edge higher to post fresh multi-month highs, where the February 2022 resistance of 1.3297 may curb any upside attempts.
In brief, it appears that GBPUSD’s recent correction is coming to an end, with the pair entering a consolidation phase. Hence, it is likely that the price extends its bullish long-term structure as long as it holds above the ascending trendline.
