GBP/USD technical analysis: 1.2380/85 can question pullback from 21-DMA

• GBP/USD takes a U-turn from 21-DMA.
• 10-week-old horizontal resistance can restrict the recovery amid bearish MACD.

Despite bouncing off 21-day simple moving average (DMA), GBP/USD is well below near-term key resistance as it takes rounds to 1.2360 during the early Asian session on Thursday.

The 1.2380/85 area comprising July 17 bottom and early-month high holds the key to the pair’s run-up to 38.2% Fibonacci retracement of May-September declines, at 1.2425, followed by 100-DMA level of 1.2463.

However, a bearish signal from 12-bar moving average convergence and divergence (MACD) increases the odds of the pair’s extended declines.

In doing so, sellers will wait for a clear break below 21-DMA level of 1.2345 in order to visit August tops nearing 1.2315 and 1.2245 mark including 23.6% Fibonacci retracement.

GBP/USD daily chart

Trend: bearish