- A formation of an inside candle pattern around the trendline has increased anxiety among investors.
- The cable is oscillating between the 20-and 50-EMAs.
- A range shift move by the RSI (14) indicates that the downside momentum has disappeared.
The GBP/USD pair has witnessed fresh demand around 1.1310 in early Asia and is aiming to overstep the crucial resistance of 1.1340. The pound bulls are having an edge of the risk-appetite theme over the greenback bulls. Meanwhile, the US dollar index (DXY) is displaying a sluggish performance marginally below the 112.00 support, and may witness an increment in volatility.
On the daily scale, the cable has formed an Inside Candle pattern at the edge of the downward-sloping trendline placed from September 13 high at 1.1738. The above-mentioned candlestick pattern indicates a squeeze in volatility and a volatility contraction near the critical area indicates an explosion ahead. Also, it acts as an inventory adjustment formation, which is difficult to confine as accumulation or distribution until a decisive move.
The asset is restricted between the 20-and 50-period Exponential Moving Averages (EMAs) at 1.1245 and 1.1447 respectively.
A range shift in the Relative Strength Index (RSI) (14) into a 40.00-60.00 range from the bearish range of 20.00-40.00 indicates that the momentum is not bearish for now. Also, the oscillator has sensed support around 40.00, which signals that a bullish reversal is on cards.
Going forward, an upside break of Monday’s high at 1.1440 will drive the cable towards September 14 high at 1.1590, followed by September 13 high at 1.1738.
On the flip side, a drop below the round-level support of 1.1200 will drag the asset toward the psychological support of 1.1000. If cable surrenders the psychological support, it will expose to more downside towards October 12 low at 1.0924.
GBP/USD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD stays pressured toward 0.6400; US NFP awaited
AUD/USD maintains offered tone toward 0.6400 in Friday's Asian trading. The pair faces headwinds from a borad US Dollar rebound amid souring risk sentiment on geopolitics. Rising bets for early RBA rate cuts and China's economic woes add to the pair's downside. US NFP data is next in focus.
Bitcoin experiences volatility post $100K milestone
Bitcoin rebounds to $97,000 on Friday after a volatile drop to $90,500, following its $100K milestone the day before. Ethereum maintains bullish momentum above key support levels, signaling a potential rally toward $4,000. In contrast, Ripple exhibits bearish tendencies, hinting at further declines.
Gold’s path of least resistance appears down as US Nonfarm Payrolls data looms
Gold's price extends the previous decline to reach a fresh eight-day low near $2,615 early Friday. Gold traders now look forward to the all-important Nonfarm Payrolls data for fresh impetus.
USD/JPY drops back below 150.00, looks to US NFP
USD/JPY drops back below150.00 early Friday, breaking its range play amid a slight deterioration in risk sentiment. Traders seem reluctant amid wavering expectations that the BoJ will deliver a rate hike later this month and ahead of the crucial US NFP report.
What is NFP and how does it affect the Forex market? Premium
NFP is the acronym for the Nonfarm Payrolls report, a compilation of data reflecting the employment situation in the United States (US). It shows the total number of paid workers, excluding those employed by farms, the federal government, private households, and nonprofit organisations.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.