The Pound Sterling (GBP) staged a strong recovery during the North American session, bouncing back from weekly lows after briefly approaching the 200-day moving average (DMA) at 1.2654. The pair is currently trading at 1.2744, up over 0.40%, indicating a potential bullish reversal.
Technical Outlook:
- Despite the rebound, the GBP/USD pair remains in a bearish trend, but buyers are currently in control in the near term. The Relative Strength Index (RSI) is still below the 50-neutral line but is showing upward movement.
- For a sustained bullish reversal, buyers need to reclaim the 50-DMA at 1.2785 and the 1.2800 level. A successful break above these levels could pave the way for a move towards the July 29 peak at 1.2888 and potentially 1.2900.
- On the other hand, if sellers push the exchange rate below 1.2700, the 100-DMA and 200-DMA could be retested. Further weakness could lead to a drop towards the 1.2600 psychological figure.
Overall, the GBP/USD pair is showing signs of a potential bullish reversal, but the bearish trend remains in place. The ability of buyers to maintain control and push the pair above key resistance levels will be crucial in determining the near-term direction.
