The GBPUSD pair made significant advances, reaching its highest level since March 13, signaling a strong bullish momentum. However, the rally eventually lost steam as the market deemed the upward movement to be overstretched. This resulted in a reversal of the pair’s direction as profit-taking activities kicked in. Despite this pullback, momentum indicators remain in positive zones, suggesting that there might still be some bullish sentiment left in the market.
Following the bounce off the 2024 bottom of 1.2298, GBPUSD has been on a steady recovery path, breaching both the 50- and 200-day simple moving averages. In the near term, the pair faces a crucial support level at 1.2669, which could act as the first line of defence against further downward pressure. If the pullback extends, the price might find support around the 1.2598 region, a level that has proven to be resilient in previous months. A breach below this level could pave the way for a descent towards the February bottom of 1.2517.
On the upside, if the bulls manage to push the price higher, immediate resistance is expected around the 1.2816-1.2826 range, marked by the recent peak and the December 2023 high. A successful break above this region could open the door for a retest of the 2024 peak at 1.2892. Beyond that, the pair could target the July 2023 resistance level of 1.2994. Overall, GBPUSD experienced a significant uptrend, reaching a three-month high before the corrective pullback.
The GBPUSD pair has been on a rollercoaster ride, experiencing both strong advances and sharp reversals in a short period. While the bullish momentum remains intact, traders should be cautious of potential pullbacks and monitor key support and resistance levels for guidance. The market sentiment towards the British Pound and the US Dollar will continue to influence the pair’s price action in the coming sessions.
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