- GBPUSD advances to its highest level since March 13
- But the rally shows signs of being overstretched
- Momentum indicators approach overbought conditions
If the price extends its upward trajectory, the bulls could initially attack the December 2023 high of 1.2826. A violation of that region could set the stage for the 2024 peak of 1.2892. Failing to halt there, the pair could storm towards the July 2023 resistance of 1.2994.
On the flipside, should the pair reverse lower, the recent support of 1.2669 could act as the first line of defence. Further retreats could cease around 1.2598, a region that held strong both in January and March. Failing to halt there, the price could descend towards the February bottom of 1.2517.
Overall, even though GBPUSD surged to a fresh two-month high on Tuesday, its rally appears to be running out of juice. Nevertheless, a break below the 50-day SMA is needed for the short-term outlook to turn bearish.