GBP/USD: The 1.2645 double-top to cap the cable

GBP/USD Wednesday's 4-hour chart is pointing to overbought conditions ahead of a critical double-top at 1.2645 which could be too much to ask, according to FXStreet’s analyst Yohay Elam.

See: UK Final Services PMI beats estimates with 29.0 in May, GBP/USD unfazed below 1.26

Key quotes 

“The Relative Strength Index on the 4-hour chart is above 70, pointing to overbought conditions and potential downfall. Cable has been approaching the critical 1.2645 level, a double top recorded in April. Reaching it and crossing it seems unlikely in the short-term.”

“Momentum remains to the upside and the currency pair is trading above the 50, 100, and 200 Simple Moving Averages. After a significant correction, GBP/USD may have room to rise.” 

“Above 1.2645, the next lines are 1.2720 and 1.2780, which date back to March.”

“Support awaits at 1.2580, a temporary cap on the way up, followed by 1.2510, another stepping stone on the way up.”