The GBP/USD pair is holding onto earlier gains after a UK CPI data release, which showed higher-than-expected inflation in the UK. The pair is trading at 1.2739, up 0.24%, but is struggling to break through the immediate resistance at 1.2800. Support lies at 1.2700, and a break below this could signal a potential dive towards a confluence of technical indicators around 1.2634.
From a technical perspective, the GBP/USD pair has a neutral to upward bias, with buyers showing momentum and leaning on the 1.2700 psychological figure as a first line of defense. To extend their gains, buyers must reclaim the March 21 high of 1.2803, with further upside potential towards the YTD high at 1.2893, 1.2900, and the psychological 1.3000 mark.
On the other hand, a retracement is likely if the GBP/USD falls below 1.2700, potentially exposing the confluence of May’s 3 high and the 100-day moving average at 1.2634, followed by the 50-DMA at 1.2581. Overall, the technical outlook for the GBP/USD pair remains somewhat uncertain as it struggles to break through key resistance levels.
In terms of price action, the GBP/USD pair is currently trading below the daily high of 1.2761, but buyers continue to show strength. The Relative Strength Index (RSI) supports the buyers, indicating a potential for further gains if key resistance levels are breached. However, a break below support at 1.2700 could lead to a deeper pullback towards the confluence of technical indicators at 1.2634.
In conclusion, the GBP/USD pair remains in a somewhat neutral to upward bias, with key resistance and support levels guiding its price action. Traders will be closely watching for a potential breakout above 1.2800 or a breakdown below 1.2700 to determine the next direction for the pair. Overall, the technical indicators suggest a potential for further gains, but a retracement cannot be ruled out if key support levels are breached.
