GBPUSD approaches 1.1730 on bullish RSI divergence, channel breakout
GBPUSD crosses the monthly bearish channel, also the 50-SMA hurdle, after briefly declining to the lowest levels since 1985. The corrective bounce takes support from the bullish RSI divergence where the lower low on the prices contrasts with the higher low of the RSI (14), which in turn suggests brighter chances of the pair’s recovery. As a result, the buyers are on the way to the three-week-old horizontal resistance area near 1.1730-40. Should the quote manage to remain firmer past 1.1740, the 1.1900 and the 1.2000 thresholds could please the bulls afterward.
Meanwhile, the stated channel’s upper line acts as the immediate support for the pair, around 1.1500. Following that, the weekly descending trend line surrounding 1.1400 seems to restrict short-term GBPUSD downside ahead of the lower line of the aforementioned bearish channel, close to 1.1340 at the latest. It’s worth noting, that the pair’s south-run past 1.1340 could keep grinding the quote slowly towards the 1.1000 psychological magnet. In a case where the pair remains bearish past 1.1000, the low marked in the year 1985 near 1.0520 will regain the market’s attention.
To sum up, GBPUSD seems to have seen enough of the downside and the bull’s turn is just around the corner. However, the fundamentals are the key and should be read carefully for clear directions.
