The British Pound (GBP) retreated against the US Dollar (USD) on Thursday after failing to break above key resistance levels. Despite this pullback, the overall uptrend for GBP/USD remains in play.
Reasons for the Pullback:
- Resistance at 1.2700: Buyers struggled to push the pair above 1.2700, a key resistance level.
- USD Rebound: The US Dollar staged a comeback after initial weakness due to expectations of Fed rate cuts.
Technical Outlook:
- Upward Bias: Despite the pullback, the momentum indicators (RSI) suggest the uptrend is still intact.
- Key Levels to Watch:
- Resistance: 1.2709 (April 9th high) and 1.2803 (March 21st high) could be future hurdles for the bulls.
- Support: A break below 1.2634/31 (confluence of May 3rd high and 100-DMA) could indicate a deeper pullback towards the 50-DMA (1.2594).
The GBP/USD price action is consolidating after encountering resistance. A break above 1.2709 could signal further upside, while a drop below 1.2634/31 could suggest a more significant pullback. However, the uptrend remains the dominant force in the medium term.