- GBP/USD gained some traction on Tuesday and shot to over one-month tops.
- The set-up favours bullish traders and supports prospects for additional gains.
- Only a sustained break below the 1.3080 region will negate the positive bias.
A sudden pickup in demand for the British pound pushed the GBP/USD pair further beyond the 1.3200 mark, to the highest level since September 7 during the early European session.
Given last week’s bounce from the vicinity of a support marked by the 23.6% level of the 1.3482-1.2676 downfall, around mid-1.2800s, the latest leg up sets the stage for additional gains. The bullish outlook is further reinforced by the fact that the GBP/USD pair has now found acceptance above the 61.8% Fibo. level.
Hence, some follow-through strength towards testing the 1.3275-80 horizontal resistance, en-route the 1.3300 round-figure mark, looks a distinct possibility. The momentum could further get extended and push the pair back towards early September daily closing highs resistance, around the 1.3380-85 region, ahead of the 1.3400 level.
On the flip side, any meaningful pullback might now be seen as an opportunity to initiate fresh bullish positions. This, in turn, should help limit the downside near mid-1.3100s. That said, a sustained break below might prompt some technical selling and dragged the GBP/USD pair back towards the 1.3100 round-figure mark.
This is closely followed by the 50% Fibo. level support, around the 1.3080-75 region, which if broken decisively, will negate the constructive set-up. The GBP/USD pair might then turn vulnerable to accelerate the fall further towards testing the 38.2% Fibo. level support, just below the key 1.3000 psychological mark.
GBP/USD daily chart
Technical levels to watch
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