GBP/USD Price Analysis: Retreats towards previous resistance near 1.2580
- GBP/USD remains pressured after reversing from April 2022 high.
- Overbought RSI conditions favor pullback from 78.6% Fibonacci Expansion (FE).
- One-month-old resistance-turned-support, 21-day EMA restrict short-term downside of the Cable pair.
- GBP/USD buyers keep the reins beyond April’s low of around 1.2275.
GBP/USD stays defensive near 1.2620 amid early hours of Tuesday’s Asian session, following its pullback from the 13-month high. In doing so, the Cable pair retreats from the 78.6% Fibonacci Expansion (FE) of it’s moves from April 03 to May 02 amid the overbought RSI (14) conditions.
With the quote’s inability to provide a daily closing beyond May 2022 peak surrounding 1.2665, coupled with a pullback from the key FE level amid overbought RSI, the GBP/USD pair is likely to extend the latest retreat.
As a result, the previous resistance line from stretched from early April, near 1.2580 gains the market’s attention.
However, the 21-day Exponential Moving Average (EMA) surrounding 1.2500 mark can challenge the GBP/USD bears afterward.
It’s worth noting that the Cable pair’s weakness past 1.2500 will direct it towards the last defense of the buyers, namely the previous monthly bottom of around 1.2275, a break of which could welcome the bears.
On the contrary, a daily closing beyond the mid-2022 peak of around 1.2665, as well as the 78.6% FE level of near 1.2675, becomes necessary to convince the GBP/USD pair buyers. Even so, the 1.2700 round figure can prod the quote’s further upside.
Should the GBP/USD bulls keep the reins past 1.2700, the March 2022 lows of around the 1.3000 psychological magnet will gain the market’s attention.
GBP/USD: Daily chart
Trend: Pullback expected