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The GBPUSD is showing an interesting pattern in chart. Cable has made a low of 1.0236. The pair is making an attempt to break above a resistance. The pair has consolidated from its seven month low. The short term signal is mildly bullish. But there is still some risk to make an upward trend.
The pair has been stagnant around the 1.2235 barrier for two days, hindered by the 20 day simple moving average(SMA) and the resistance line from July. The Relative Strength Index (RSI) indicator on the 4 hour chart managed to hold above 50 despite the latest decline.
However, since GBP/USD rose above 1.2300, if it stabilizes there, 1.2393 is likely to act as stiff resistance before moving to 1.2500. The outlook will stay bearish as long as 1.2300 resistance hold. The pair performance in the coming days will provide further insights into these forex market dynamics.