Baxia Markets
May 21, 2024

GBPUSD Breaks Key Resistance at 1.2700, Eyes Further Gains Amid Bullish Sentiment

market analysis header image

GBPUSD recently achieved a significant milestone, breaking through a major resistance level at 1.2700, which had been a crucial barrier for the pair. This breakout, highlighted by a red rectangle, follows one to two weeks of a strong bullish rally. The market now shows a strong bullish sentiment, as indicated by various technical indicators on the 4-hour timeframe.


The Exponential Moving Averages (EMAs) are a key indicator of the prevailing trend. On the 4-hour chart, the EMA 50 is positioned above the EMA 200, a classic sign of bullish momentum. This alignment suggests that the recent upward trend is supported by sustained buying interest.GBPUSD Breaks Key Resistance at 1.2700, Eyes Further Gains Amid Bullish Sentiment


The Ichimoku cloud, a comprehensive indicator that provides insight into trend direction and momentum, further supports the bullish outlook. The Chikou span (lagging span), Tenkan-sen (conversion line), and Kijun-sen (baseline) are all positioned above the cloud. This configuration indicates a strong bullish trend. Additionally, several small-bodied candlesticks have appeared after the breakout above 1.2700, suggesting a period of sideways price action rather than an immediate bearish reversal. This consolidation phase is likely a short-term pause before the pair advances higher.


Minor indicators, such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD), also echo the bullish sentiment. The RSI remains in the bullish zone, having broken above the 60% level and maintaining its position above 40%. This behavior typically signals sustained upward momentum. Similarly, a bullish MACD is indicated when the signal line crosses above the zero line, which is currently the case for GBPUSD.


Overall, the sentiment for GBPUSD remains firmly bullish. The recent breakout above the key resistance level of 1.2700 has set the stage for further gains. While a shallow pullback could occur as the market takes a breather, the underlying bullish trend appears strong.


GBPUSD's recent performance and the alignment of major technical indicators point to a continuation of the bullish trend. The breakout above 1.2700, supported by both major and minor indicators, suggests that the pair is likely to advance higher after a brief consolidation phase. Traders should watch for continued support above the 1.2700 level and monitor the technical indicators for signs of further bullish momentum.


Key Economic Releases to Watch Today


Forecast 0.5% vs Previous 0.6%



News Article CTA - Trading with Baxia Markets 2024

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. 

Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

Subscribe by Email