GBP Continues To Find Buyers On Dips

The Relative Strength Index on the four-hour chart rising to 70 area. Other indicators are also positive – Momentum is to the upside and the pair is trading above the 50, 100, 200 Simple Moving Averages.

On the upside, firm break above 1.3012 resistance will resume the whole rise from 1.1958. On the daily chart, the 200 SMA sits just below the flag formation, so that of course is a bullish and supportive sign. The flag suggests that we are going to go looking towards the 1.38 level above, but before that the price should face and break 1.33 the key resistance.

The 1.2770/50 region below is an area that is important from a structural standpoint, and now that we have the 50-day SMA reaching towards the 200-day SMA, we could get the so-called “golden cross” that attracts a lot of buying.

Overall, a downside correction may be expected, but GBP/USD still has room to extend its gains afterward. We believe that the 1.25 key level underneath is also going to be supportive as it is a major round figure.

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