GBP/USD: upside capped
GBP/USD retraced to $1.5650 following the yesterday’s test of the $1.5700 resistance (200-day SMA, 50-week SMA). We concede a short-term pullback of the cable (see the MACD divergence on the H4, overbought RSI), but remain bullish as long as the $1.5585 support holds.
We are ready to buy the cable on a break above $1.5700 with a target of $1.5760 (61.8% Fibo). However, it will be hard for the buyers to push higher, as there is a lot of resistance above: $1.5775/5800 (100- and 200-week SMAs, bottom of the daily Ichimoku) and $1.5830 (bearish and wide monthly Ichimoku). In our view, there is a high possibility of a bearish reversal from there.
Chart. H4 GBP/USD