GBP/USD Price Analysis: Downside looks likely post triangle breakout, 1.1900 a critical support
|- A symmetrical triangle formation near two-year lows is strengthening the greenback bulls.
- The cable has surrendered the support of 50-EMA at 1.2000.
- The RSI (14) has sensed barricades around 60.00 which add to the downside filters.
The GBP/USD pair has witnessed a steep fall after failing to tap Friday’s high of 1.2055 in the early Asian session. The downside move by the greenback bulls has dragged the cable below the psychological support of 1.2000.
After a severe fall, the pair is displaying a volatility squeeze. The asset has turned sideways and is trading in a symmetrical triangle pattern. The downward-sloping trendline of the above-mentioned pattern is plotted from July 4 high at 1.2161 while the upward-sloping trendline is placed from Wednesday’s low at 1.1876.
The cable has surrendered the cushion of the 50-period Exponential Moving Average (EMA) at 1.2000. Also, the 200-EMA at 1.2056 is declining which indicates a continuation of the downside bias.
Meanwhile, the Relative Strength Index (RSI) (14) has faced resistance around 60.00 and has slipped lower, which indicates that the asset is no more bullish for now.
The cable may display more losses if the asset drops below Friday’s low at 1.1920. An occurrence of the same will drag the asset to Wednesday’s low at 1.1876, followed by the 26 March 2020 low at 1.1777.
Alternatively, a decisive move above Friday’s high of 1.2055 will send the asset towards July 4 high at 1.2161. A breach of the latter will drive the cable towards June 28 high at 1.2292.
GBP/USD hourly chart
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