GBP/USD: Gains to gather traction on a break above key resistance at 1.2160 – OCBC

GBP/USD erased a large portion of gains it recorded on Tuesday but managed to hold comfortably above 1.2000. Economists at OCBC Bank note that the pair needs to clear the 1.2160 to enjoy further gains.

Bullish divergence?

“Bearish momentum on daily chart faded while RSI rose. Potential bullish divergence not ruled out.”

“Key resistance at 1.2160 levels (21, 50-DMAs). A break above this can see GBP gains gather traction but failure to clear could see GBP revert to recent range.” 

“Support at 1.1930/50 (23.6% fibo retracement of September low to December high, 100, 200-DMAs).”