GBP/USD has to establish itself beyond 1.2450/1.2500 to affirm next leg of uptrend – SocGen

GBP/USD is at a crossroads after having returned to 1.24. Cross above 1.2450 can lead to an extended up-move, economists at Société Générale report.

Defending 1.2130 crucial for continuation in bounce

“The 1.24 area proved too lofty in December and profit-taking ensued. Will this time be different? The main downside risks stem from a rebound in US bond yields and broader risk aversion.”

“Daily MACD is in positive territory, however, it is at a lower level as compared to the previous one denoting receding upside momentum.”

“The pair has to establish itself beyond 1.2450/1.2500 to affirm next leg of uptrend. If this break materializes, the up move could extend towards 1.2600 and 1.2750, the 61.8% retracement from 2021.”

“Defending the 50DMA at 1.2130 would be crucial for continuation in bounce.”