Technical Analysis – GBPUSD bulls trying to gain ground as 50-SMA breached
Posted on September 10, 2019 at 9:43 am GMT
Anthony Charalambous, XM Investment Research Desk
GBPUSD met a roadblock at 1.2380 after a recent one-week drive up from a thirty-one-month low of 1.1957. The price climbed above the 50-day simple moving average (SMA) and the 1.2293 resistance, which is the 23.6% Fibonacci retracement level of the down move from 1.3381 to 1.1957.
Dwindling positive momentum suggests that the price could adopt a short-term sideways approach as the MACD has risen slightly above zero into the positive territory, after distancing itself from its red trigger line, and the RSI is flat hovering in the bullish area.
Traders need to be aware of the bigger bearish sentiment from the downward sloping SMAs, which are like a black cloud hovering above.
If the 1.2380 resistance holds and the bears slip below the 1.2293 level, which is the 23.6% Fibo and where the 50-day SMA lies, the price could stagger towards the mid-Bollinger band ahead of the 1.2100 support. Dropping further, the lower-Bollinger band at 1.2020 could interrupt the move to test the recent low of 1.1957. Extending below the trough, the sellers could reignite the medium-term bias, opening the door for the 1.1900 handle.
With some elbow grease from the bulls pushing past the 1.2380 resistance, the 1.2500 point, which is the 38.2% Fibo, could provide some strain ahead of the 100-day SMA at 1.2530. Propelling price to the 50.0% Fibo of 1.2670 could have buying interest reappear to test the 200-day SMA before the 1.2780 swing high.
Summarizing, a bearish picture persists in the short and medium term. A close above 1.2578 could turn the short term to neutral, whilst above 1.2780 would be required for the medium term.