GBPUSD recently advanced to its highest level since March 13th, showcasing a strong bullish momentum in the market. However, this rally was short-lived as the pair started to reverse lower, signaling that the uptrend may have become overstretched. The price action was driven by profit-taking activities, leading to a temporary pullback in the exchange rate.
The GBPUSD pair has been on a steady recovery path since bouncing off the 2024 bottom of 1.2298. This upward movement led to the violation of both the 50- and 200-day simple moving averages (SMAs), further fueling the bullish sentiment. In the event of a continued pullback, the immediate support level to watch is 1.2669, followed by 1.2598 and 1.2517. These levels have proven to be strong support zones in the past and could provide a base for the price to stabilize.
On the flip side, if the bulls manage to regain control, the pair could face resistance at the 1.2816-1.2826 range, marked by recent peaks and highs from December 2023. A successful breach of this resistance zone could pave the way for a move towards the 2024 peak of 1.2892 and potentially even higher towards the July 2023 resistance level of 1.2994. The overall outlook for GBPUSD remains positive despite the recent setback, with the potential for further upside if key resistance levels are breached.
The GBPUSD trading pair experienced a notable surge to a three-month high before facing a reversal due to profit-taking and overextended rally. The technical analysis points to key support and resistance levels that could dictate the future price action of the pair. Traders should closely monitor these levels and market dynamics to make informed trading decisions. As always, risk management and a disciplined approach are essential when navigating the ups and downs of the forex market.