GBP/USD Price Analysis: Breakdown of triangle warrants more weakness, 1.1400 eyed
|- Lower tilted 20-and 50-EMAs add to the downside filters.
- A symmetrical triangle breakdown has underpinned the greenback bulls.
- The RSI (14) has shifted into the bearish range of 20.00-40.00.
The GBP/USD pair has displayed a vulnerable performance after surrendering the critical support of 1.1600 in the Asian session. The cable is declining vigorously and has printed an intraday low of 1.1571 as long-term inflation expectations have soared. As per Citi, the inflation expectations for a 10-year period have advanced to 4.8% against the desired rate of 2% by the Bank of England (BOE).
A breakdown of the symmetrical triangle chart pattern on an hourly scale has weakened the pound bulls. The upper portion of the above-mentioned chart pattern is placed from Tuesday’s high at 1.1761 while the lower portion is plotted from Monday’s low at 1.1645. The breakdown of the triangle has resulted in heavy volume and wider ticks.
Declining 20-and 50-period Exponential Moving Averages (EMAs) at 1.1610 and 1.1645 respectively are indicating more weakness ahead.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which has triggered a fresh selling leg.
A less-confident pullback move to near Wednesday’s low at 1.1600 will activate a bargain sell. An occurrence of the same will drag the asset towards 19 March 2020 low at 1.1472. A slippage below 1.1472 will drag the cable towards the round-level support at 1.1400.
On the flip side, a break above Wednesday’s average price at 1.1650 will send the asset towards the round-level resistance at 1.1700, followed by Tuesday’s high near 1.1760.
GBP/USD hourly chart
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