RSI overbought conditions warrant caution for bulls

  • GBP / USD consolidates the move to multi-month highs of 1.4234.
  • Overbought conditions on the daily RSI are cause for concern.
  • GBP / USD could correct itself before resuming the uptrend towards 1.43.

GBP / USD is consolidating the vertical rally to 35-month highs of 1.4234, as the bulls lack momentum after failing to regain the 1.4200 level after the subsequent pullback to 1.4150.

At the time of writing, GBP / USD is trading at 1.4178, up 0.45% on the day. The pair moves away from highs despite renewed weakness around the US dollar across the board.

Therefore, the cautious tone observed around the pair could be mainly attributed to the overbought conditions on the RSI on the daily chart.

The bulls are now contemplating the next move, with the 1.4300 level still in sight. Although a correction could be seen before GBP / USD moves higher again.

Looking down, the bears have to break below the daily lows of 1.4106 to extend the downward correction.

GBP / USD daily chart

GBPUSD

GBP / USD technical levels

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