GBPUSD is looking bullish in the short term after surging above its daily moving averages (MAs) and the long-term descending trend line. Prices hit a two-and-half-month high of 1.1853 on Friday, and the technical indicators are all pointing to further positive momentum in the near term.
The MACD oscillator is heading upwards, strengthening its positive momentum above its trigger and zero lines, suggesting plenty of scope for additional upside moves. The RSI is moving slightly sideways into bullish territory but has yet to approach the 70 overbought level.
Immediate resistance to further gains would likely come from the 1.1890, which capped prices in the preceding sessions. This is also near the August 16 inside swing low of 1.2000 so this could prove to be a potentially difficult hurdle for the pair to overcome. If there is a successful break above this area, further resistance could be met around the 200-day SMA at 1.2230.
If, however, the strong upside momentum was to lose steam and the pair moves lower, support would initially come from the 1.1640 barrier and the 20-day SMA at 1.1500. A slip below this level could take prices towards the 50-day SMA and the short-term uptrend line near 1.1340. Failure to hold above this line would switch the focus back to the downside and attention would increasingly turn to the 1.1150 hurdle.
In the more medium-term picture, the broader bearish outlook recently shifted to a positive one in the short term and if the market surpasses the 200-day SMA, that may endorse this view.