• GBPUSD shifts to recovery mood but not out of the woods yet

• Technical indicators cannot confirm bullish bias

• A break above 1.2840 is needed to bring new buyers

GBPUSD rotated northwards after reaching its 200-day simple moving average (SMA) and the long-term support trendline from the 2021 trough near 1.2760. The latter initiated the ongoing bullish trend back in April and could assist the market once again.

The technical signals, however, are currently questioning the bullish action in the market. Despite the upside reversal in the stochastic oscillator, the RSI hasn’t climbed above its 50 neutral mark and the MACD has yet to show any improvement within the negative region, both reflecting fragile buying appetite.

Besides with the price trading below the broken bullish channel and its 20 -and 50-day SMAs within the 1.2783-1.2840 zone, the bears might have the luck on their side. Otherwise, an extension above the latter could add fresh impetus to the price, lifting it towards the 1.3000 psychological mark. More gains from there could bring the 2022 top of 1.3141 and the upper band of the bullish channel next in consideration.

Looking for support levels, the 200-day SMA and the 1.2670-1.2700 region will be come first into view if selling forces resurface. A break below that floor could stabilize near the 1.2570 territory, where the falling restrictive line from May 2021 is positioned. If that proves fragile too, the trendline zone of 1.2455-1.2490 could be the next pivot point.

All in all, GBPUSD has not escaped downside risks despite its latest recovery attempt. While the rebound near a long-term support trendline could keep buying appetite alive in the short-term, only a sustainable recovery above 1.2840 would shift the attention back to the short-term uptrend.