GBPUSD has erased all the declines and trades above MA levels

The GBP/USD has fully erased the declines caused by the weekend’s tariff news, driven by the positive US/Mexico truce, which is expected to last at least through the next month. This recovery has been significant, as the pair has regained its footing in the market following the negative sentiment earlier in the week.

Technically, the price has moved above a key swing area between 1.2351 and 1.23759, which was an important resistance zone. This breakout signals a shift in momentum to the upside. Moreover, the pair has reclaimed the 38.2% Fibonacci retracement level of the move from the December high to the January low at 1.23689, further supporting the bullish case.

In addition to breaking above the swing area and the retracement level, GBP/USD has also surged above both its 100-hour and 200-hour moving averages, which are currently near 1.2408. These moving averages were acting as resistance earlier in the session but have now transitioned into support levels. This shift in market dynamics suggests that sellers have missed their opportunity to drive the price lower.

As long as the pair remains above these critical levels, the technical outlook remains favorable for further upside, with the bias increasingly tilted toward a continued rally.

This article was written by Greg Michalowski at www.forexlive.com.