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MTrading Team • 2024-05-20

GBPUSD bulls jostle with key upside hurdles within rising wedge

GBPUSD bulls jostle with key upside hurdles within rising wedge

GBPUSD struggles to extend the biggest weekly gains since early March while confronting a five-week-old horizontal resistance area surrounding 1.2700-2710 early Monday. In doing so, the Pound Sterling takes clues from the overbought RSI (14) and the sluggish MACD signals while hovering near the upper end of the one-month-old rising wedge bearish chart formation. It’s worth noting that the pair’s upside clearance of 1.2710 won’t be an open invitation to the Cable buyers as the stated wedge’s top-line surrounding 1.2720 will test the upside momentum. Following that, the quote’s advances toward the late March high of near 1.2800 and then to the yearly peak of around 1.2895 can’t be ruled out.

It’s worth mentioning, however, that the oscillators suggest a pullback in the GBPUSD price and hence a horizontal resistance area comprising the tops marked since early May, close to 1.2635-45, gains the market’s attention. In a case where the Cable prices drop beneath the 1.2635, the 50% Fibonacci retracement of March-April fall, surrounding the 1.2600 threshold, will lure the sellers. Above all, a convergence of the 200-bar Exponential Moving Average (EMA) and the aforementioned rising wedge’s lower line, close to 1.2565-60, appears a tough nut to crack for the pair sellers, a break of which will confirm the bearish chart pattern suggesting a theoretical fall targeting the area surrounding mid-1.2100s.

In summary, the GBPUSD pair will likely witness a pullback in the prices but the bears need validation from the 1.2565-60 and the UK inflation/PMI data.

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