Bears bumped into strong support at the 200-day SMA, consolidation ahead

• GBP/USD held steady at 1.2485 on Wednesday.
• The pair side-way traded in the last session, using the 200-day SMA as support.
• Bears are running out of steam. 

On Wednesday, the GBP/USD closed the session with mild gains, at 1.2485. Bears managed to take the Cable to 1.2433 earlier in the session, near the 200-day Simple Moving Average area, but the bulls quickly reversed the fall.

Following the sharp decline seen at the beginning of last week, which saw the Cable declining by nearly 1%, the bears seem to be running out of steam, with little gas left in the tank to break below the key 200-day SMA. In that sense, on the daily chart, the Relative Strength Index (RSI) is comfortably positioned in the negative territory below its midline and has a flat slope, complemented by a negative signal from the Moving Average Convergence Divergence (MACD), which is showing red bars. Unless bears manage to gather momentum, the Cable may side-ways trade above the 1.2430 area in the next sessions to consolidate losses. That being said, traders should eye the slope of the 20-day SMA, which suggests that it is en-route to perform a bearish cross with the 200-day SMA and that could be the sparkle that reignites the bearish momentum.

If the bulls fail to defend the 200-day SMA, support below line up at 1.2400, 1.2370, and 1.2350. On the other hand, the next targets for the buyers are seen at 1.2500, 1.2540-50 and the 20-day SMA at 1.2600.

GBP/USD Daily Chart