GBPUSD has been in a recovery mode since May 26, when it triggered buy orders near the key support territory of 1.2340 that acted as a strong resistance zone before being broken to the upside on April 3. The fact that the pair remains above that zone and above all three of the plotted moving averages paints a positive near-term picture.

Both the RSI and the MACD are detecting upside momentum, adding to the notion that Cable could trade north for a while longer. The former is above 50 and the latter lies above both its zero and trigger lines. However, the RSI has, perhaps temporarily, shifted down, which raises the risk of a small setback before the next impulsive wave.

The bulls seem to be getting closer to the 1.2670 barrier, marked by the peak of May 10, and if they are strong enough to overcome it, they could put the 1.2975 zone on their radars. That territory acted as a key support level back in March and April 2022. If that zone doesn’t hold, then the trend may continue towards the high of March 23 at 1.3305.

On the downside, a break below 1.2330 could turn the outlook neutral, while the move that could invite more bears into the action may be a decisive dip below 1.1795, a zone that acted as strong support in January and March, and also back in July 2022. Such a move could initially aim for the 1.1650 barrier, the break of which may set the stage for declines towards the low of November 9 at 1.1335.

To sum up, despite the slide during the better half of May, GBPUSD bulls were able to recharge from near the 1.2340 area, which keeps the bigger picture positive. For the outlook to turn negative, the bears may need to dive all the way down to the 1.1795 territory and violate it.