GBPUSD has been experiencing significant swings within a rectangle pattern for the past four months. In the short term, the pair has been in a recovery mode after hitting the bottom of its range and in today's session it managed to surpass the crucial 1.2445 area , which has acted as strong resistance both in December and January.
The momentum indicators currently suggest that near-term risks are tilted to the upside. Specifically, the RSI is climbing above its 50-neutral mark, while the MACD histogram is strengthening above both zero and its red signal line.
If bullish pressures intensify, the price could initially attempt to close above 1.2445, which is the upper boundary of its rectangle pattern. Surpassing that zone, the pair could ascend towards the May 2022 peak of 1.2666. A break above the latter may open the door for the 1.3000 psychological mark.
Alternatively, if the rebound falters and the price moves to the downside, the 1.2270 region could act as the first line of defense. If that barricade fails, the bears could target the 1.2160 support, which lies very close to the 50-day simple moving average (SMA). Further retreats may then cease at the 1.1920 hurdle.
In brief, GBPUSD stormed to a fresh nine-month high after breaking above the crucial 1.2445 zone , which has curbed its upside twice in the past four months. Therefore, a successful close above that area could signal the beginning of a sustained uptrend.