GBPUSD Rises After Finding Support At 7-Week Low

Technical analysis of Forex market

GBPUSD has recorded a stunning rally since yesterday, finding support at the seven-week low of 1.3670. The price advanced above the 20-period simple moving average (SMA) in the 4-hour chart, with the RSI currently increasing positive momentum above the 50 level. The MACD is approaching the zero level, holding above the trigger line.

If the pair continues the bounce up, immediate resistance could be met at the 23.6% Fibonacci retracement level of the down leg from 1.4235 to 1.3670 at 1.3800. Steeper upside pressure could see the 40- and 100-period SMAs at 1.3810 and 1.3860 respectively ahead of 1.3875 and the 38.2% Fibonacci of 1.3885.

Should the market extend losses again, support could come from the seven-week low of 1.3670. A significant leg below this area could send prices towards the 1.3565 and 1.3520 zones.

In the bigger picture, the pair is bearish as long as it holds below the 100-day SMA. In case it violates this line, bulls could take the upper hand.