GBP/USD starts the new year on a modestly positive note, edging higher to trade around 1.3470 during Asian hours on Friday. While the pair has lost some upside momentum, price action continues to reflect a broadly constructive technical outlook, with Sterling holding above key short-term support levels despite slipping slightly below the lower boundary of its ascending channel.
Technical setup signals resilient bullish bias
From a technical standpoint, the nine-day Exponential Moving Average (EMA) continues to rise and remains above the 50-day EMA, with spot prices holding above both indicators. This moving average configuration underlines a prevailing bullish bias, supported further by the positive slope of the 50-day EMA, which signals a still-intact medium-term uptrend.
Short-term dynamics remain supportive, as the pair continues to respect the nine-day EMA on pullbacks. As long as this structure holds and the medium-term average continues to edge higher, upside risks remain favored.
Momentum indicators reinforce this view. The 14-day Relative Strength Index (RSI) is hovering around 62.8, comfortably above the neutral 50 level but still below overbought territory. This suggests firm bullish momentum while leaving room for additional gains.
Key levels to watch for continuation or consolidation
A sustained rebound back into the ascending channel would strengthen the bullish case and open the door for a retest of the three-month high at 1.3534, last seen on December 24. A daily close above this level could extend the advance toward the six-month high at 1.3726, followed by the upper boundary of the ascending channel near the 1.3750 area.
On the downside, failure to reclaim the channel could lead to a period of consolidation rather than an immediate trend reversal. However, a decisive break below the nine-day EMA at 1.3468 and the 50-day EMA near 1.3362 would undermine the short- and medium-term bullish structure. In such a scenario, selling pressure could intensify, exposing the pair to deeper losses toward the eight-month low around 1.3010.
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