The GBPUSD pair witnessed a strong upside recovery due to broad-based US dollar weakness. This weakness seems to have stemmed from rumors that the incoming administration is weighing tariff plans on imports. However, the upside recovery is still vulnerable as an ISM Service PMI higher than 54.00 will constitute a headwind for the greenback. Meanwhile, a print of less than 50 will allow for more gains to be recorded in the GBPUSD market.
Key Price Levels:
Resistance Levels: 1.2600, 1.2650, 1.2700
Support Levels: 1.2500, 1.2450, 1.2400
GBPUSD Market Upside Recovery Surpasses the 1.2500 Threshold
Price activity in the GBPUSD market quickly rose back upward through the 1.2400 following a dip below that price level. The market subsequently proceeded upwards and broke through the 1.2500 resistance level. As a result, this pair now trades above the 1.2500 threshold level, but the market still lies below all the Moving Average (MA) lines.
Although the Stochastic Relative Strength Index lines continue to rise steeply upwards, with the lead line now above the 60 level and the lagging line below the 40 mark of the indicator, this suggests that volatility is healthy. Should expected fundamentals arise favorably for the pair, price action may pop through the next psychological resistance level.
GBPUSD Surpasses Key Technical Landmarks on the 4-Hour Chart
In the GBPUSD 4-hour market timeframe, price action can be seen proceeding upward after rebounding off the 50-day MA line as a support level. This has continued for three sessions, with the current session staying in favor of buyers. In addition, the Stochastic RSI lines have delivered an upside crossover in the overbought region of the indicator.
Also, the resulting lines are proceeding upwards and towards the 100 threshold of the indicator. However, with the 100- and 200-day MA lines lying ahead, traders may have to wait for more impetus from emerging relevant economic news towards a breakthrough of the 1.2600 price level or a continuation of the bearish trend.
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