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MTrading Team • 2023-10-12

GBPUSD rebound appears elusive below 1.2510

GBPUSD rebound appears elusive below 1.2510

GBPUSD seesaws at a three-week high ahead of the UK data dump, probing a six-day winning streak. However, the RSI (14) line steadies near the overbought region and joins a looming bear cross on the MACD to suggest that the bulls are running out of steam. With this, a pullback towards the late September swing high of around 1.2270 becomes imminent but a convergence of the 100-SMA and 23.6% Fibonacci retracement of the pair’s August-October downturn, near 1.2215, appears a tough nut to crack for the Cable bears afterward. Even if the quote drops below 1.2215, the previous resistance line stretched from late August, close to 1.2090 by the press time, will precede the monthly low of around 1.2035 and the 1.2000 threshold to act as final defenses of the Pound Sterling buyers.

Meanwhile, the 38.2% Fibonacci ratio of nearly 1.2320 guards the immediate recovery of the GBPUSD pair ahead of the 200-SMA hurdle of 1.2375. Following that, the 50% Fibonacci retracement surrounding 1.2415 can lure the Cable bulls. Above all, the 1.2510 resistance confluence comprising a convergence of the seven-week-long descending trend line and the 61.8% Fibonacci retracement, also known as the Golden Ratio, will challenge the Pound Sterling buyers before giving them control. In a case where the pair remains firmer past 1.2510, the odds of witnessing a run-up towards the August 30 peak of around 1.2750 can’t be ruled out.

To sum up, the bullish momentum fades but the road toward the south is long and bumpy while the upside needs validation from 1.2510.

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