GBP/USD Analysis: Rebound Continues Amidst Technical Signals

4 Mac

The GBP/USD exchange rate experienced a positive rebound the previous Friday, rising from the round figure of 1.2600 after touching a one-and-a-half-week low. This positive momentum continued into the following Monday, with spot prices reaching a multi-day peak in the range of 1.2660-1.2665 during the Asian session. However, the Relative Strength Index (RSI) indicator on the 4-hour chart remains below 50, indicating some weakness, and the exchange rate stays below 1.2650, where the 200-period Simple Moving Average and the 23.6% Fibonacci retracement of the long-term uptrend converge. If the exchange rate fails to surpass 1.2650 again, sellers could take control. In such a scenario, support levels at 1.2600 and 1.2540 could be tested. On the other hand, if the GBP/USD exceeds 1.2650 and holds it as support, technical buyers may enter the market, paving the way for further gains towards 1.2680 and 1.2700. Meanwhile, US stock index futures are trading positively, which could support a bullish opening on Wall Street and attract risk flows that may further sustain the GBP/USD. Best regards and happy Monday to all.