GBP/USD traded slightly higher today, after hitting support slightly below the crossroads of the 1.3170 level, and the upside support line drawn from the low of March 15th. Despite still trading well below the longer-term downside line taken from the high of July 29th, recently, the pair has been printing higher lows and higher highs above the aforementioned upside line, and thus we see chances for more advances for now.
We believe that if the bulls are strong enough to stay in the driver’s seat, we could see them pushing for another test near 1.3300, where a break would confirm a forthcoming higher high and may set the stage for extensions towards the 1.3417 zone, marked by the high of March 3rd.
Shifting attention to our short-term oscillators, we see that the RSI has started to turn up after hitting support near its 50 line, while the MACD, although below its trigger line, shows signs of bottoming within its positive territory. Both indicators suggest that the pair may start picking up positive speed soon, which adds to the view that more advances may be in the works.
On the downside, we would like to see a clear dip below 1.3170 before we abandon the notion for further advances. This could signal the break below the upside line drawn from the low of March 15th, and may initially target the 1.3120 territory, which provided support between March 17th and 22nd. Another break, below 1.3120, could see scope for extensions towards the 1.3040 territory, marked by the low of March 16th.
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