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The GBP/USD pair on Wednesday reversed an early dip to the 1.2770 region and rallied over 100 pips intraday, extending its recent recovery from four-month lows set last Friday. Haresh Menghani from FXStreet analyzes the cable from a technical perspective.

Key quotes

“The cable’s repeated bounce from the vicinity of mid-1.2700s might have already negated the possibility of any further downfall. However, it will be prudent to wait for some follow-through buying beyond the 1.2900 round-figure mark before positioning for any further appreciating move.”

“Above the 1.2900, the pair is likely to surpass the 1.2945-50 intermediate hurdle and aim back towards reclaiming the key 1.30 psychological mark. The latter coincides with 50-day SMA and should act as a key pivotal for the pair’s next leg of a directional move.”

“On the flip side, the 1.2850-45 region now seems to act as immediate support, which if broken might turn the pair vulnerable to slide back towards the 1.2800 round-figure mark. Any subsequent weakness might continue to attract some dip-buying and remain limited near the 1.2740-25 region.”