Societe Generale Research discusses GBP/USD technical outlook, and flags a scope for further gains after forming a bullish engulfing pattern last week.
" GBP/USD recently flirted with the up-sloping trend drawn since 2016 and approached December lows of 1.2505/1.2477. It has staged an initial recovery from those levels forming a Bullish Engulfing last week. The pair has now crossed above an hourly descending channel and is now testing recent peak of 1.2758/1.2815. Daily RSI has been posting positive divergence which denotes signs of stabilization are slowly becoming visible however a breakout is awaited," SocGen notes.
"A move beyond 1.2758/1.2815 will mean possibility of a larger rebound towards the 200-DMA near 1.2950, also the 50% retracement of recent correction with next hurdle at the down sloping trend from April 2018 at 1.3025/48. 1.2698/60 is immediate support," SocGen adds.