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GBP/USD technical analysis: Break of 1.2740 can reward oversold RSI with additional recovery

  • Oversold RSI favors buyers but a week-old resistance line acts as an immediate upside hurdle.
  • Break of 1.2700 could help bears to target January levels.

Even if oversold levels of 14-bar relative strength index (RSI) triggered GBP/USD pullback, the quote presently confronts a week-long trend-line resistance near 1.2740 ahead of the UK markets open on Monday.

As a result, a successful break of 1.2740 becomes pre-requisite for the quote to extend the latest recovery towards 1.2810 and May 16 high near 1.2865.

During the pair’s additional rise beyond 1.2865, another downward sloping trend-line, at 1.2930 could challenge trade sentiment.

Alternatively, 1.2700 round-figure might hold the pair’s downside confined prior to shifting bears towards January 15 low near 1.2670.

In a case where sellers refrain from respecting 1.2670, 1.2600 and 1.2580 could become their favorites.

GBP/USD 4-Hour chart

Trend: Pullback expected

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