GBP/USD: Overbought conditions implies a correction

The cable has topped a downtrend resistance line stretching from the peak of 1.3070 in mid-February though the break has not been confirmed yet. GBP/USD Friday's four-hour chart is pointing to a breakout above downtrend resistance but overbought conditions, Yohay Elam from FXStreet briefs.

Key quotes

“Bullish signs include surging above the 50, 100, and 200 Simple Moving Averages on the four-hour chart and benefiting from upside momentum.”

“On the other hand, the Relative Strength Index is above 70 – indicating overbought conditions – and implying a downside correction.”

“Support awaits at 1.2945, which was a stepping stone on the way down in late February. It is followed by 1.2920.” 

“Resistance is at 1.3020, a high point in late February. It is followed by 1.3070.”