Bulls challenge 200-hour SMA, around 1.2635 area

GBP/USD stages a goodish intraday bounce from 100-day SMA support.
The technical set-up still seems tilted firmly in favour of bullish traders.
Bulls now await a sustained move beyond 1.2635 confluence resistance.

The GBP/USD pair built on its steady intraday bounce from over one-week lows and climbed further beyond the 1.2600 mark through the early European session.

The pair was last seen trading near the top end of its daily trading range, with bulls now looking to extend the momentum beyond the 1.2635 confluence region. The mentioned level comprises of 200-hour SMA and the 23.6% Fibonacci level of the 1.2076-1.2813 recent leg up, which should act as a pivotal point for intraday traders.

Meanwhile, oscillators on the daily chart maintained their bullish bias and have again started gaining traction on hourly charts, supporting prospects for additional gains. Hence, some follow-through strength towards retesting the very important 200-day SMA, around the 1.2690 region, now looks a distinct possibility amid a subdued USD demand.

Any subsequent move beyond the 1.2700 mark is likely to confront stiff resistance near the 1.2740 horizontal zone, which if cleared might be seen as a fresh trigger for bulls. The pair might then aim back towards surpassing the 1.2800 round-figure mark and extend its recent strong positive move witnessed over the past four weeks or so.

On the flip side, the daily swing lows around the 1.2545 region coincide with 100-day SMA and should continue to protect the immediate downside, rather attract some dip-buying. That said, some follow-through selling has the potential to drag the pair further towards the next major support near the key 1.2500 psychological mark.