GBP/USD Price Analysis: Recovery stalls near 200-hour SMA/descending trend-line confluence barrier

• GBP/USD added to the previous day’s strong recovery move from multi-week lows.
• Mixed oscillators on hourly/daily charts warrant some caution for aggressive traders.

The GBP/USD pair built on the previous day’s strong intraday recovery from multi-week lows and gained some follow-through traction for the second consecutive session on Tuesday. The pair shot to a four-day high level of 1.2267, albeit struggled to extend the momentum and failed near a descending trend-line resistance extending from late-April swing highs.

The mentioned hurdle now coincides with 200-hour SMA and should act as a key pivotal point for traders as the focus now shifts to the Fed Chair Jerome Powell’s congressional testimony. 

Meanwhile, technical indicators on hourly charts have been gaining positive traction and support prospects for an extension of the pair’s ongoing recovery from sub-1.2100 levels. However, oscillators on the daily chart are yet to catch up with the momentum and maintained their bearish bias, warranting some caution before placing any aggressive bullish bets.

Hence, it will be prudent to wait for a sustained strength beyond the mentioned confluence hurdle before positioning for any further near-term appreciating move for the major. The pair might then head towards reclaiming the 1.2300 round-figure mark before bulls eventually aim to test the next major hurdle near the 1.2330-40 horizontal level.

On the flip side, weakness back below the 1.2200 mark will reinforce the stiff resistance and might prompt some fresh selling, dragging the pair further towards the 1.2175 support. Some follow-through selling now seems to turn the pair vulnerable to accelerate the fall back towards the 1.2100 mark with some intermediate support near the 1.2130 area.

GBP/USD 1-hourly chart

Technical levels to watch