The GBPUSD price action suggests that headwinds have been quite dominant in this market. This saw the pair tear through the medium-term support level at the 1.2600 mark. However, a rebound has occurred in the market, which appears to be the effect of the Fed’s rate cut. How far can this take the market? Let’s try to find out.
Key Price Levels:
Resistance Levels: 1.6541, 1.6600, and 1.6700
Support Levels: 1.6500, 1.6400, and 1.6300
GBPUSD Buyers May Charge Through the Resistance at the 1.564 Price Level
Bears have caused a significant price decline in the GBPUSD market. This brought prices down through the supports at the 1.2700 and 1.2600 price levels. However, as earlier mentioned, the Federal Reserve rate cut came to the rescue of this pair. Upside forces brought the price back upwards, near the 1.2500 mark.
Yet, price action remains significantly below the 21-day Moving Average (MA) curve. In addition to this, the Moving Average Convergence Divergence indicator lines have fallen below the equilibrium level, while the indicator bars appear solid red. Consequently, this suggests that price action is still in a bearish region despite the rebound.
GBPUSD Upside Forces Are Making Progress, But May Get Exhausted Soon
Price action in the GBPUSD 4-hour market is steadily rising upwards while fundamentals are still creating some tailwind. Nevertheless, the price action remains below the 21-day MA line. However, the market could be seen making its way towards the 21-day MA line. Likewise, the Relative Strength Index (RSI) is rising towards the overbought region, however, in a way that seems too sensitive given the magnitude of the price increase in the market.
Consequently, this seems to caution traders who may want to come up with forex signals with targets around the 1.2590 or 1.2600 mark. Therefore, traders should monitor any fundamentals that may pose a threat to the ongoing trend. Consequently, it is fair to speculate that this market may hit the 1.2570 mark in the meantime.
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