GBP/USD Rally Pushes RSI Towards Overbought Territory

A bull-flag appears to be unfolding in GBP/USD as it clears the June high (1.2848), with the four-day rally in the exchange rate pushing the Relative Strength Index (RSI) towards overbought territory.

GBP/USD Rate Outlook

GBP/USD registers a fresh yearly high (1.2935) as it extends the series of higher highs and lows from last week, with the move above the 1.2850 (61.8% Fibonacci extension) to 1.2890 (50% Fibonacci extension) region opening up the 1.3000 (78.6% Fibonacci extension) handle.

A further advance in GBP/USD may push the RSI above 70 for the first time this year, with the next area of interest comes in around 1.3140 (61.8% Fibonacci extension) to 1.3190 (100% Fibonacci extension), which incorporates the April 2022 high (1.3167).

However, failure to clear the 1.3000 (78.6% Fibonacci extension) handle may keep the RSI out of overbought territory, with a move below the 1.2850 (61.8% Fibonacci extension) to 1.2890 (50% Fibonacci extension) region bringing the 1.2750 (50% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) area back on the radar.