So, the GBPUSD currency pair has been on a bit of a downward slide, but here`s the twist – there`s a chance it might bounce back up in the short term.
You see, the market isn`t really expecting the US or UK central banks to raise interest rates anytime soon. This could actually lend some support to the pound. But, hold on, the UK`s economic growth is slowing down, which could be a downer for the currency.
Taking a look at the charts, on the daily one, GBPUSD has kind of rebounded and made its way back to an important resistance level. And guess what? The moving averages are also playing nice and crossing upwards, hinting that there might be a stronger bullish momentum. So, a bigger upward correction could be in the cards.
Zoom in to the 4-hour chart, and you`ll notice that GBPUSD recently busted through a minor resistance zone around 1.2220. However, the price seems a bit stretched out, which might mean it needs a breather – maybe a little pullback or a period of consolidation before it decides its next move.
Now, the 1-hour chart tells us something interesting. The price is showing signs of losing steam, and the MACD indicator near the trendline suggests this. Typically, this kind of situation can lead to pullbacks or even reversals.
So, if you`re a buyer, keep an eye out for potential pullbacks to previous resistance-now-turned-support around 1.2220. It might offer a good entry point.
Summing it up, GBPUSD is on a bearish trend, but don`t rule out the chance of a short-term correction to the upside. For buyers, keep an eye on those pullback opportunities. And sellers, watch for possible breakouts. It`s a bit of a balancing act!
