GBPUSD remains below major barrier levels.
GBPUSD lost traction and erased some of its daily gains. Nonetheless, the pair manages to remain above 1.2500, aided by selling pressure on the US Dollar (USD). The near-term technical picture indicates that the bullish bias is intact, but buyers may be wary until the pair clears 1.2560.
Japan’s suspected involvement in the foreign exchange market caused a selloff in the US dollar during the Asian trade hours on Monday. The USD Index, which measures the USD’s value against a basket of six major currencies, was last reported down 0.3% for the day. However, GBPJPY is down roughly 1.5% on the day, implying that the Japanese Yen (JPY) captures capital outflows from the Pound Sterling as well. As a result, the upward potential for GBPUSD remains limited.
Meanwhile, US stock index futures are trading marginally higher on Monday. If the risk sentiment improves throughout the American session, the USD may remain under pressure due to a paucity of high-tier macroeconomic data.
On Wednesday, the Federal Reserve (Fed) will publish its monetary policy choices. Later this week, the US Bureau of Labor Statistics will release the April jobs report, which will contain the unemployment rate. Rate and nonfarm payrolls data. Before the Fed meeting, investors may avoid from establishing significant positions.
GBPUSD Technical Analysis
The technical prognosis indicates that the bullish bias remains intact.
1.2530 and 1.2560 serve as major resistance levels for the pair.
After reaching its highest level since April 12 near 1.2550 at the start of the week.
The Relative Strength Index (RSI) signal on the 4-hour chart remains at 60, and GBP/USD continues to trade above the 100-period Simple Moving Average (SMA), which is currently at 1.2500.
On the upside, 1.2530 (Fibonacci’s 38.2% retracement of the latest decline) serves as temporary resistance before 1.2560, where the 200-day SMA is placed. A daily close above the latter might entice buyers and pave the way for another move up toward 1.2600.
The first support level is 1.2500 (100-period SMA), which is above 1.2450 (Fibonacci 23.67% retracement, 50-period SMA).
