news-20102024-150123

GBP/USD saw a slight decline last week to 1.2973 before bouncing back with the help of support around the 1.3000 mark. This led to a neutral bias for the upcoming week. A clear breakthrough above the 1.3102 resistance level would indicate that the pullback from 1.3433 is over, shifting the bias to a bullish outlook for a stronger rebound. On the other hand, a sustained trade below 1.3000 could suggest that the overall uptrend from 1.2298 has concluded, potentially leading to a deeper decline towards the 61.8% retracement level at 1.2732.

Looking at the broader picture, as long as the 1.3000 support level holds, the upward trend from the 2022 low of 1.0351 is still intact. The next target would be the 61.8% projection level of 1.0351 to 1.3141 from 1.2298, which stands at 1.4022. However, the presence of a mild bearish divergence in the D MACD indicator suggests that a decisive break below 1.3000 could indicate a potential medium-term top has already formed, leading to a deeper retracement towards the 1.2664 support level.

In the grand scheme of things, as long as the 1.2298 support level remains unbroken, the overall uptrend from the long-term low of 1.0351 is expected to persist. The significant breakthrough of the 55-week Exponential Moving Average (EMA) currently at 1.2811 signals a bullish trend reversal. However, confirmation would require a break above the structural resistance at 1.4248. Without this confirmation, the price movements from 1.0351 could simply be part of a consolidation phase.

Analysts suggest that market participants should closely monitor the key support and resistance levels mentioned to gauge the future direction of GBP/USD. Any significant developments in the broader economic landscape could also influence the currency pair’s movements in the coming weeks. Traders are advised to exercise caution and implement risk management strategies to navigate the potential volatility in the forex market.