GBP/USD has regathered bullish momentum after Monday’s correction.
Dollar is struggling to find demand ahead of Powell’s hearing.GBP/USD has regathered its bullish momentum following a downward correction on Monday and reached its highest level in more than two months above 1.3600. The technical outlook suggests that the pair is poised to continue to push higher in the near term but a hawkish Fed policy could limit the upside by boosting the dollar.
For the third time since the beginning of the year, buyers defended the 50-period SMA on the four-hour chart, suggesting that the bearish pressure could ramp up in case this level turns into resistance. Until that happens, the near-term outlook is likely to remain bullish. Furthermore, the pair continues to trade in the ascending regression channel coming from December.
On the upside, 1.3635/40 (static level, middle line of the ascending channel) aligns as the first resistance. Additional gains toward 1.3680 (static level) could be witnessed if the pair clears that hurdle.Supports are located at 1.3580 (lower line of the channel), 1.3560 (static level) and 1.3540 (50-period SMA).It’s also worth noting that the Relative Strength Index (RSI) indicator on the same chart is approaching the overbought territory, which could trigger a technical correction before the pair can extend its rally.