GBPUSD Bulls Charge Higher: Uptrend Resumes or Short-Lived Rally?

GBPUSD has displayed bullish momentum, breaking above a key resistance level and reaching new highs. This analysis dissects the technical situation and explores potential scenarios for the currency pair.

Uptrend Resumes: Resistance Breached

  • 1.2709 Resistance Broken: GBPUSD decisively surpassed the 1.2709 resistance level, which previously acted as a hurdle. This breakout signals a resumption of the uptrend that commenced from 1.2518.

Potential for Further Gains:

  • 1.2785 Resistance: The immediate target for the bulls is the 1.2785 resistance level. Overcoming this level could pave the way for a further rise towards the 1.2827 level, representing the December 28, 2023 high. Reaching this level would be a significant bullish development and potentially solidify the uptrend.

Support to Watch: Bulls Need to Defend

  • 1.2695 Initial Support: While the outlook appears bullish, it’s crucial to acknowledge potential downside risks. The initial support level to monitor is at 1.2695. A decline below this level could indicate a downward correction and potentially bring the price back towards the rising trend line visible on the 4-hour chart. This trend line served as support previously and a break below it could signal a potential trend reversal.

Overall Sentiment:

The technical outlook for GBPUSD has turned bullish following the breakout above 1.2709 resistance. The bulls are currently in control, aiming for higher levels. However, close attention should be paid to the mentioned support levels, particularly the rising trend line, to assess the uptrend’s strength and identify any potential reversal signs.