GBP/USD faces a strong challenge at 1.2693.
GBP/USD has been under pressure since early November, with bears pushing hard to breach the strong support around 1.2693. In the short term, the bias remains negative as the RSI hovers below its neutral threshold of 50 and the MACD continues to move beneath its red signal line.
Should the price break the floor around 1.2693, and more importantly close under the 1.2660 bottom, the lowest mark registered since June 18, bearish market action may pick up speed towards the older range of 1.2582-1.2345. If that proves a weak obstacle, then the focus will immediately shift down to 1.2100.
Alternatively, a bounce up may stop around 1.2830 where the price paused several times over the past four months, while higher than that, a stronger resistance may appear at 1.2920, near the bottom of the Ichimoku cloud and the 50-day simple moving average (SMA). A steeper rally could also reach an important obstacle at 1.3040.
Turning to the medium-term picture, the neutral profile is still in place as long as the pair trades within the 1.2660-1.3300 range. But with the 50-day MA reversing south far below the 200-day MA, chances for a more bearish outlook are running high.
To summarise, GBP/USD holds a negative bias in the short term, while in the medium term the market is still neutral.
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