GBPUSD Continues to Soar to New Heights
The GBPUSD pair has been on a remarkable bull run, reaching a fresh two-and-a-half-year high of 1.3365 in the latest trading session. This surge comes after a strong rally that saw the pair add almost 3% following a bounce off the key psychological level of 1.3000. While the market sentiment remains positive, there are signs that the pair may be overextended, as indicated by technical oscillators.
Technical Analysis Points to Potential Correction
Technical indicators are showing signs of a potential correction in the GBPUSD pair. The stochastic oscillator, which measures the momentum of price movements, is starting to turn lower from overbought levels. Additionally, the Relative Strength Index (RSI) has dipped following a pullback from the 70 level, suggesting a weakening of bullish momentum. The 20-day simple moving average is also losing its upward momentum, indicating some downside pressure on the pair.
Support and Resistance Levels to Watch
In the event of a market retreat, the GBPUSD pair could find support at the immediate level of 1.3265 before potentially testing the 20-day SMA at 1.3170. Further downside movement could see the pair reaching the 23.6% Fibonacci retracement level at 1.3113, followed by the key support level of 1.3000, which coincides with the 50-day SMA.
On the other hand, if the pair continues its upward momentum, it could target the 1.3400 territory before aiming for the 1.3640 resistance level, which was last achieved in February 2022. The current bullish trend in GBPUSD has been strong since April, with the pair consistently making higher highs and higher lows.
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In conclusion, the GBPUSD pair has been on a bullish trajectory, reaching new highs and showing resilience in the face of market uncertainties. While technical indicators suggest a potential correction, the overall trend remains positive for the pair. Traders should continue to monitor key support and resistance levels to make informed decisions in their trading strategies.
