- GBP/USD was seen consolidating strong intraday gains to the highest level since February 24.
- Slightly overbought RSI on hourly charts capped the upside near an ascending channel hurdle.
- The set-up seems tilted in favour of bullish traders and supports prospects for additional gains.
The GBP/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range near the 1.4200 mark, or the highest level since February 24.
The heavily offered tone surrounding the US dollar – fueled by dovish Fed expectations – assisted the GBP/USD pair to gain traction for the third consecutive session on Tuesday. The intraday positive momentum got an additional boost following the release of mostly upbeat UK monthly employment details.
However, overstretched conditions on hourly charts capped the GBP/USD pair near a resistance marked by the top boundary of a one-month-old ascending channel. This makes it prudent to wait for a sustained break through the mentioned barrier before positioning for any further near-term appreciating move.
Meanwhile, oscillators on the daily chart are still far from being in the overbought territory and support prospects for an eventual breakout through the mentioned barrier. This, in turn, suggests that the path of least resistance for the GBP/USD pair remains up amid sustained USD selling bias.
On the flip side, the previous monthly swing highs, around the 1.4165-60 region now seems to protect the immediate downside and any subsequent fall might be seen as a buying opportunity. This, in turn, should help limit the downside for the GBP/USD pair near the 1.4100 mark, at least for the time being.
GBP/USD 4-hour chart
Technical levels to watch
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