Regaining the 50-day SMA is critical to unleashing the further rally

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With the deadlock in the Brexit trade deal between the European Union and the United Kingdom, GBP / USD lacks enough momentum to climb above the 1.30 level.

However, lingering pessimistic sentiment around the US dollar, in light of renewed optimism about a possible US fiscal stimulus deal, continues to put upward pressure on the pair.

From a short-term technical perspective, GBP / USD has failed to gain acceptance above the 50-day moving average, now 1.3012, for six consecutive days.

Therefore, a daily close above this region could provide much needed momentum for the bulls and at the same time produce a breakout of the symmetrical triangle seen on the daily chart.

The next resistance is around the 1.3080 level, the October high, before buyers are targeting a breakout above 1.3100.

The 14-day RSI remains in the bullish zone, supporting the case for a further rally.

On the other hand, maintaining the strong support zone around 1.2905 is essential. That level is the confluence of the 21-day SMA and the support of the uptrend line.

Should that level break, the upward sloping 100-day SMA at 1.2850 could be put to the test.

GBP / USD daily chart



Credits: Forex Street

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