GBP/USD Price Analysis: Closing on 200-day SMA hurdle

• GBP/USD eyes test of 200-day SMA hurdle after Monday's 0.78% rally. 
• A break above the key average could invite stronger buying pressure. 

GBP/USD is trading just 15 pips short of the widely-tracked 200-day simple moving average resistance at 1.2691. 

The SMA hurdle capped gains twice in April. Meanwhile, the breakout observed in the first half of June trapped bulls on the wrong side of the market. As such, the 200 day SMA is the level to watch out for in the short-term. 

A convincing move above the average hurdle at 1.2691 would validate the above-50 or bullish reading on the 14-day relative strength index and open the doors to 1.30. A breakout, if confirmed, is unlikely to trap buyers on the wrong side of the market this time, as overall the greenback looks weak. There is a breakout on EUR/USD and gold is trading at nine-year highs. 

The outlook would turn bearish if the July 14 low of 1.2480 is breached. 

Daily chart

Trend: Bullish above 200-day SMA

Technical levels