GBPUSD could not find enough buyers to pierce through December’s high of 1.2445, finishing Monday’s session with mild losses at 1.2375.
The bulls, however, may not give up the battle, as the clear positive trajectory in the RSI and the MACD mirrors persisting buying interest. Yet, with the Stochastic oscillator flattening within the overbought region above 80, some caution is required.
In other encouraging signals, the 50- and 200-day simple moving averages (SMAs) have logged a golden cross recently for the first time in more than two years, indicating a strengthening bull market.
A forceful move above 1.2445 could lift the price straight up to May’s resistance zone of 1.2665, where the steep ascending line drawn from the record low of 1.0324 is positioned. The 1.2800 territory had been limiting upside and downside movements during the 2019-2020 period and may next attract attention before the door opens for the 1.3000-1.3150 constraining area.
On the downside, a close below 1.2320 may squeeze the price into the 1.2175-1.2100 region, where the 20- and 50-day simple moving averages (SMAs) and two constraining lines are placed. If the bears claim that territory, the sell-off could stretch towards the 200-day SMA and the 23.6% Fibonacci retracement of the 1.0324-1.2445 upleg at 1.1945. The 1.1900 psychological mark could also come under consideration given its protective role at the start of January.
All in all, GBPUSD is expected to remain attractive to buyers in the short term. An extension above 1.2445 is needed to upgrade the short-and medium-term outlook. Otherwise, a pullback below 1.2320 may bring the bears back into play.