GBP/USD surges to fresh 14-month high
2023.06.20 06:20
GBPUSD has been in a prolonged uptrend since October 2022 supported by its long-term ascending trendline. Even though the pair stormed to a fresh 14-month high of 1.2847 on Friday, it quickly pared some gains due to reaching overbought conditions.
The momentum indicators currently suggest that bullish forces are holding the upper hand. Specifically, the RSI is hovering slightly below its 70-overbought mark, while the MACD is strengthening above its red signal line in the positive zone.
Should buying pressures intensify and the price jump to fresh multi month highs, immediate resistance could be found at the 1.3000 psychological mark. Surpassing that zone, the pair might ascend towards the March 2022 low of 1.3160, which could serve as resistance in the future. A violation of that territory may set the stage for the March 2022 high of 1.3295.
Alternatively, if the pair reverses lower, the previous high of 1.2678 could act as the first line of defense. Should that floor collapse, the spotlight may turn to 1.2445 before the May low of 1.2307 comes under examination. Further retreats could then cease at 1.2195, which served both as resistance and support in the past months.
Overall, GBPUSD seems to have the necessary momentum to edge higher and extend its structure of higher highs. However, a downside correction should not be ruled out as the pair has approached overbought conditions.
