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