GBPUSD has displayed a recent shift in momentum, prompting a closer look at the technical situation. This analysis explores the potential scenarios for the currency pair.
Upside Momentum Stalls:
- Trend Line Break: GBPUSD notably broke below the rising trend line on the 4-hour chart. This technical indicator suggests a potential completion of the uptrend that began at 1.2599. The recent high of 1.2893 could be the peak of this upward move.
Consolidation or Reversal?
- Pullback as Consolidation: This pullback could be a sign of consolidation within the longer-term uptrend that started from 1.2518.
- Rangebound Trading Expected: In the near future, we might witness range trading between 1.2750 as support and 1.2893 as resistance. This sideways movement suggests a pause in the uptrend as bulls and bears battle for control.
Key Levels to Watch:
- 1.2750 Support Crucial: The critical level to watch is 1.2750. If this support holds, it strengthens the bullish case and indicates a possible resumption of the uptrend from 1.2518. A potential target of 1.3000 remains achievable after a successful breakout from this consolidation phase.
- 1.2500 Next Support Level: Conversely, a breakdown below 1.2750 support would signal a weaker uptrend and a potential reversal. This scenario could see the price fall further towards 1.2500.
Overall Sentiment:
The technical outlook for GBPUSD has become uncertain. While the longer-term uptrend remains intact, the recent break below the trend line and the consolidation phase suggest a pause or a possible correction. Close attention should be paid to the price action around the mentioned support and resistance levels to determine the future direction of GBPUSD.