The British pound rallied above the 1.2300 level against the US dollar last week as the greenback weakened against most major currencies.
GBP to USD analysis shows that buyers could be preparing to launch an attack towards the 1.2600 level.
GBP/USD medium-term price trend
The pound broke above the 1.2300 level against the dollar last week, following an improvement in risk sentiment and weak US growth data.
GBP/USD technical analysis over the medium-term shows that bulls are increasingly likely to target the 1.2600 resistance level.
More medium-term upside remains likely while the price trades above the pair’s 50-day moving average, around the 1.2270 level.
The 1.2640 level is an important technical area that GBP/USD bulls may target. Sterling was rejected twice from this area during the month of April.
Additionally the GBP/USD pair’s 52-week, 100 and 200-day moving averages are also located around the 1.2640 level.
GBP/USD short-term price trend
GBP/USD technical analysis shows that the pair has a bearish short-term trading bias while the price trades below the 1.2350 level.
The lower time frames show that a bullish inverted head and shoulders pattern has formed following the rally towards the 1.2340 level.
According to the size of the bullish reversal pattern, the GBP/USD pair could rally towards the 1.2600 level.
An even larger bullish reversal pattern will also form if price reaches the 1.2480 level. The larger pattern has an upside projection of nearly 400 points.
Watch out for further gains in the GBP/USD pair while price trades above the 1.2340 resistance level.
GBP/USD technical summary
GBP to USD analysis shows that a rally towards the 1.2600 level remains possible while the price trades above the pair’s 50-day moving average, around the 1.2270 level.