GBP/USD Defends April Low

GBP/USD attempts to trade back above the 50-Day SMA (1.2442) as it registers a fresh weekly high (1.2447), and the exchange rate may track the positive slope in the moving average as it seems to be defending the April low (1.2275).

GBP/USD Rate Outlook

Failure to break/close below the 1.2280 (23.6% Fibonacci extension) to 1.2340 (23.6% Fibonacci extension) area may lead to a near-term rebound in GBP/USD as the Relative Strength Index (RSI) rebounds from its lowest reading since March.

A close above the moving average may push GBP/USD towards 1.2650 (38.2% Fibonacci extension), with a move above the yearly high (1.2680) opening up the 1.2760 (61.8% Fibonacci retracement) region.

However, GBP/USD may threaten the April low (1.2275) if it fails to push above the moving average, with a break/close below the 1.2280 (23.6% Fibonacci extension) to 1.2340 (23.6% Fibonacci extension) area opening up the 1.2030 (38.2% Fibonacci extension) region).

--- Written by David Song, Strategist