The Pound Sterling has rebounded above the key 1.2700 support level, currently trading at 1.2720, driven by an improved risk appetite following comments from a Bank of Japan (BoJ) official suggesting a cautious approach to rate hikes.
Technical Outlook:
The GBP/USD pair remains in a neutral to bearish bias after breaking below the 50-day moving average (DMA) at 1.2785. However, the recent rebound above 1.2700 indicates some buying interest.
If the pair manages to hold above 1.2700 and reclaim the 50-DMA, it could potentially test the 1.2800 mark. On the downside, a break below 1.2700 could lead to a retest of the August 6th low at 1.2672, with further downside potential towards the 200-DMA at 1.2651.
Overall, the GBP/USD outlook is currently neutral, with the potential for further upside if buyers can maintain control and push the pair above key resistance levels. However, downside risks remain, and a break below 1.2700 could trigger a deeper pullback.
