• GBPUSD has its best day since July

• Bulls await a close above 1.2300

GBPUSD enjoyed a whopping start to the week, marking one of its strongest days since mid-July to rise as high as 1.2257 on Monday.

The technical outlook is looking promising at the moment. The pair confirmed a bullish doji candlestick pattern near last week’s low of 1.2089 and around the support trendline drawn from the 2022 low, suggesting more positive sessions ahead. The technical indicators align with this scenario too, with the RSI entering the bullish area above 50 and the MACD recovering above its red signal line. Likewise, the stochastic oscillator has resumed its positive slope.

The upper band of the bearish channel is being examined at 1.2278, while the 23.6% Fibonacci retracement is within a breathing distance at 1.2300. The long-term falling constraining line from May 2021 could also keep the bulls busy in the same neighborhood.

Another extension higher could take a halt within the 1.2385-1.2455 area, where the 50- and 200-day simple moving averages (SMAs), and the 38.2% Fibonacci level are all located. A break above that border could brighten the short-term outlook, especially if the 1.2500 round level proves easy to pierce through. Then, the spotlight would immediately turn to the 61.8% Fibonacci of 1.2588.

In the event of a bearish correction, the 2022 ascending trendline could again come to the rescue at 1.2155. If not, the bears will attempt to reach October’s low of 1.2036, a break of which could direct the pair towards the descending line from November 2021 at 1.1960. The 1.1900-1.1925 region could be the next target.