GBP/USD Price Analysis: Downside halts for a while but remains favored, 1.1350 a key support
|- A double bottom formation has resulted in a firmer rebound in the asset.
- The RSI (14) is on the verge of shifting into the bullish range of 60.00-80.00.
- A slippage below the two-year low at 1.1350 will drag the cable into unchartered territory.
The GBP/USD pair has witnessed a firmer rebound after defending its two-year low at 1.1350, recorded last week. The cable has extended its gains after overstepping the round-level resistance of 1.1400 and has reached its critical hurdle of 1.1440. The rebound move seems full of confidence and is expected to stay in bullish territory for a while, however, the broader picture is extremely brutal.
On an hourly scale, the asset has rebounded after forming a Double Bottom around a two-year low at 1.1350. A re-test of potential lows with lower selling pressure and absorption of the same with higher buying interest pushed the asset higher.
It is worth noting that the cable has crossed the 20-and 50-period Exponential Moving Averages (EMAs) at 1.1413 and 1.1426 respectively while the 50-EMA is still above the shorter one. This signals the strength of the pound bulls.
Also, the Relative Strength Index (RSI) (14) is on the verge of shifting into the bullish range of 60.00-80.00, which will trigger pound bulls for sheer upside momentum.
Should the asset drop below the fresh two-year low at 1.1350, greenback bulls will drag the cable towards the round-levels support of 1.1300. A slippage below the latter will drag the asset towards the 7 January 1985 low at 1.1245.
On the flip side, a break above Friday’s high at 1.1480 will send the asset towards Thursday’s high at 1.1542, followed by the round-level resistance at 1.1600.
GBP/USD hourly 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.