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Thursday, 18 May 2017 17:45 Written by

Technical Analysis – GBPUSD maintains bullish bias; needs daily close above 1.30

Posted on May 18, 2017 at 8:41 am GMT by the XM Investment Research Desk

 


GBPUSD is neutral in the near term after the recent sharp rally from the 1.2600 area is taking a pause and the market is consolidating gains around 1.2900.

The 1.300 level has proven to be strong resistance as prices failed to cross this barrier after coming close to it a few times this month. Upside momentum faded at the end of April to early May and RSI reached overbought territory at 70, suggesting that consolidation or a pullback was due. Immediate support lies at 1.2900 and below this, 1.2775, before a key support level comes into view at 1.2600.

Looking at the bigger picture, the underlying bias is bullish as prices were in an uptrend from early March when prices rose off 1.2108.

As long as GBPUSD remains above immediate support at 1.2900, the underlying bullish bias is expected to hold. The 50-day moving average made a bullish cross above the 200-day MA on May 12, so this would support the bullish outlook. A daily close above 1.3000 soon would see a resumption in the uptrend.

Currently there are no signs of a reversal in the trend but a drop below the 1.2600 level, which is close to the 200-day MA, would change the medium-term bullish market structure to a more neutral one.

 

Sourcewww.xm.com

Read 193 times Last modified on Thursday, 18 May 2017 17:45

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