GBP/USD traded slightly higher today, after hitting support slightly below the crossroads of the 1.3170 level and the upside support line drawn from the low of Mar. 15. Despite still trading well below the longer-term downside line taken from the high of Jul. 29, recently, the pair has been printing higher lows and higher highs above the aforementioned upside line. Thus we see chances for more advances for now.
We believe that if the bulls are strong enough to stay in the driver’s seat, we could see them pushing for another test near 1.3300, where a break would confirm a forthcoming higher high and may set the stage for extensions towards the 1.3417 zone, marked by the high of Mar. 3.
Shifting attention to our short-term oscillators, the RSI has started to turn up after hitting support near its 50 line. The MACD, although below its trigger line, shows signs of bottoming within its positive territory. Both indicators suggest that the pair may start picking up positive speed soon, which adds to the view that more advances may be in the works.
On the downside, we would like to see an apparent dip below 1.3170 before we abandon the notion for further advances. This could signal the break below the upside line drawn from the low of Mar. 15 and may initially target the 1.3120 territory, which provided support between Mar. 17 and 22.
Another break, below 1.3120, could see scope for extensions towards the 1.3040 territory, marked by the low of Mar. 16.
