GBP/USD Poised for Test of Resistance, But Momentum Might Be Waning
The Pound Sterling (GBP) is currently trading higher against the US Dollar (USD) at 1.2772, buoyed by thin market conditions due to holidays. However, technical indicators suggest a potential pullback.
Market Update:
- GBP/USD Upward Trend: The currency pair is currently in an upward trend, aiming to challenge the 1.2803 resistance level. A break above this level could lead further upside towards the YTD high of 1.2894.
Technical Analysis (GBP/USD):
- Overbought RSI: The Relative Strength Index (RSI) is in overbought territory, indicating that the recent upward momentum might be fading. This suggests a potential pullback in the near term.
- Support and Resistance: If the pair retreats, initial support lies at 1.2750 and 1.2700. Conversely, a break above 1.2803 could open the door for a test of the YTD high.
Key Upcoming Event:
- US Core PCE Data: The release of US Core PCE data on Friday will be a major event to watch, as it could influence the USD's direction and impact the GBP/USD pair.
Overall:
The GBP/USD faces a potential test of resistance at 1.2803. However, the overbought RSI reading suggests a possible pullback before further upside. The US Core PCE data later this week could be a significant factor in determining the pair's future direction.