GBP/USD Price Analysis: Pound Sterling defends 1.2000 as risk-off mood eases


  • An ease in the risk aversion theme has led to a rebound in the Cable.
  • The Pound Sterling has recovered to near the 20-EMA around 1.2038.
  • The formation of a Descending Triangle pattern indicates a consolidation broadly.

The GBP/USD pair is displaying a confident recovery after dropping to near 1.2005 in the early Asian session. The Cable has extended its rebound move to near 1.2034 but is expected to remain volatile as the overall sentiment is still risk-averse.

The US Dollar Index (DXY) has witnessed a correction to near 104.35 as the festive mood is keeping the asset inside the woods on a broader note. Also, the 10-year US Treasury yields have witnessed a gradual selling pressure to near 3.87%.

On an hourly scale, the Cable is auctioning in a Descending Triangle chart pattern, which indicates a volatility contraction. The Pound Sterling has sensed buying interest after dropping to near the horizontal support of the aforementioned chart pattern placed from December 22 low at 1.1992. While the downward-sloping trendline is plotted from December 19 high at 1.2242.

Cable has also challenged the 20-period Exponential Moving Average (EMA) at around 1.2038, which indicates that the short-term trend is turning bullish.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation head.

Should the Cable break above December 27 high at 1.2112, Pound Sterling bulls will drive the asset toward December 21 high at 1.2189 followed by December 19 high at 1.2242.

On the flip side, a decisive downside below December 22 low at 1.1992 will trigger a breakdown of the Descending Triangle and will drag the Cable toward November 29 low at 1.1940. A slippage below the latter will expose the Cable for more weakness toward November 30 low around 1.1900.

GBP/USD hourly chart

GBP/USD

Overview
Today last price 1.204
Today Daily Change 0.0023
Today Daily Change % 0.19
Today daily open 1.2017
 
Trends
Daily SMA20 1.2176
Daily SMA50 1.1874
Daily SMA100 1.1669
Daily SMA200 1.2057
 
Levels
Previous Daily High 1.2126
Previous Daily Low 1.2002
Previous Weekly High 1.2242
Previous Weekly Low 1.1992
Previous Monthly High 1.2154
Previous Monthly Low 1.1147
Daily Fibonacci 38.2% 1.205
Daily Fibonacci 61.8% 1.2079
Daily Pivot Point S1 1.1971
Daily Pivot Point S2 1.1925
Daily Pivot Point S3 1.1847
Daily Pivot Point R1 1.2094
Daily Pivot Point R2 1.2172
Daily Pivot Point R3 1.2218

 

 

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