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Denis Sergienko • 2022-05-30

GBPUSD rebound remains doubtful unless crossing 1.2780

GBPUSD rebound remains doubtful unless crossing 1.2780

GBPUSD refreshed its monthly high the previous day but the bulls don’t have smooth sailing due to the weekly closing below the 1.2630-40 horizontal hurdle. That said, RSI and MACD have been supportive of the recovery moves and hint at the further upside. However, a convergence of the descending trend line from February and the 50-DMA, around 1.2775-80, appears a tough nut to crack for the buyers. It’s worth noting, though, that a clear run-up beyond 1.2780 could propel the prices towards a 50% Fibonacci retracement of February-May downside, near 1.2950.

Meanwhile, pullback moves may initially dribble around the 23.6% Fibonacci retracement level of 1.2530 before the GBPUSD bears approach a one-month-old horizontal support area surrounding 1.2400. Should the quote fail to bounce off 1.2400, the 1.2260-55 region can act as the last defense for the sellers. During the cable’s weakness past 1.2250, the recent multi-month low around mid-1.2100s and the May 2020 bottom of 1.2075 will gain the market’s attention.

Overall, GBPUSD approaches the short-term key hurdles which hold the keys to a trend change.

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