GBP/USD Eyes Recovery Above 1.2600 After Early Year Drop
The GBP/USD pair is currently trading around 1.2515 after recovering from the sharp decline that drove the pair below 1.2400 for the first time in nearly ten months. The 2-hour chart highlights a potential bullish rebound, supported by the price bouncing off the 1.2350 support level. Key resistance looms at 1.2600, where further upward movement may encounter challenges.
The recent drop was driven by thin liquidity conditions and risk-off sentiment, which amplified volatility. However, the pair's recovery above 1.2500 is a positive signal for bulls, indicating that buyers are gradually regaining control. Both EMA 34 and EMA 89 are hovering above the current price, acting as dynamic resistances that need to be breached for sustained upward momentum.
In the short term, a break above 1.2600 could pave the way for GBP/USD to test the 1.2650 level or higher. On the downside, if the price slips below the 1.2350 support, the pair may revisit the 1.2300 psychological level. Traders should closely monitor market liquidity, US dollar dynamics, and risk sentiment as key drivers for the next directional move.
The recent drop was driven by thin liquidity conditions and risk-off sentiment, which amplified volatility. However, the pair's recovery above 1.2500 is a positive signal for bulls, indicating that buyers are gradually regaining control. Both EMA 34 and EMA 89 are hovering above the current price, acting as dynamic resistances that need to be breached for sustained upward momentum.
In the short term, a break above 1.2600 could pave the way for GBP/USD to test the 1.2650 level or higher. On the downside, if the price slips below the 1.2350 support, the pair may revisit the 1.2300 psychological level. Traders should closely monitor market liquidity, US dollar dynamics, and risk sentiment as key drivers for the next directional move.
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