- GBP / USD is moving higher for the third day in a row and rises to one-week highs.
- Sustained strength above the 200 hourly SMA could be seen as a trigger for intraday bulls.
- Mixed oscillators on hourly / daily charts warrant caution before opening aggressive positions.
GBP / USD has built on this week’s recovery move, from the 100-day SMA support near the 1.3670-65 region, and is moving higher for the third day in a row on Wednesday. Momentum has pushed the pair to week-long highs at the start of the European session, with the bulls now looking for a move above the 1.3800 level.
Looking at the technical picture, sustained strength beyond the 200 hourly SMA around the 1.3780 region could be seen as a trigger for intraday bullish traders. That said, a modest rally in the US dollar from three-week lows, amid a modest rally in US Treasury yields, could limit gains for the GBP / USD pair.
Meanwhile, the GBP / USD pair is hovering around the 50% Fibonacci retracement of the recent drop of 1.3919-1.3669. Some subsequent purchases beyond the round 1.3800 level will reaffirm the positive intraday outlook and allow the bulls to target to test the 61.8% Fibonacci near the 1.3825-30 region.
The constructive structure is reinforced by the fact that the technical indicators on the hourly charts have been gaining positive ground and are still far from being in overbought territory. That said, the oscillators on the daily chart have yet to confirm a bullish bias and warrants some caution before opening aggressive positions.
On the other hand, any significant retracement now appears to find decent support near the 38.2% Fibonacci, around the 1.3765-60 region. Failure to defend the aforementioned support will negate any short-term bullish bias and could trigger some technical selling and drag GBP / USD to the 1.3730-25 (23.6% Fibonacci) area on its way to the round 1.3700 level.
GBP / USD 1 hour chart
GBP / USD technical levels
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