GBP/USD rally pushes RSI towards overbought territory

GBP/USD clears the January high (1.2448) to trade to a fresh yearly high (1.2526), with the Relative Strength Index (RSI) reflecting a similar dynamic as it climbs toward overbought territory.

GBP/USD Rate Outlook

GBP/USD may attempt to test the May 2022 high (1.2667) as it initiates a series of higher highs and lows, and a move above 70 in the RSI is likely to be accompanied by a further advance in the exchange rate like the price action from last year.

A break/close above 1.2650 (38.2% Fibonacci extension) may push GBP/USD towards 1.2760 (61.8% Fibonacci retracement), but lack of momentum to test the May 2022 high (1.2667) may keep the RSI below 70 and push the exchange rate back towards the 1.2300 (50% Fibonacci retracement) to 1.2340 (23.6% Fibonacci extension) region.

--- Written by David Song, Strategist

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