GBP/USD Price Analysis: Downside momentum loss to support cable, 1.1650 a critical hurdle
|- A symmetrical triangle formation near monthly lows indicates a loss of momentum and supports a pullback move.
- Declining 20-and 50-EMAs still favor the downside bias.
- The RSI (14) is attempting to recapture the neutral range of 40.00-60.00
The GBP/USD pair is displaying back-and-forth moves in a narrow range of 1.1609-1.1623 in the early Tokyo session. The cable has turned sideways after defending the critical support of 1.1600. Broadly, the asset is oscillating in a wider range of 1.1607-1.1645 and is likely to display volumes and wider ticks.
A Symmetrical Triangle chart formation on an hourly scale near a two-year low is displaying signs of momentum loss, which may deliver a solid pullback move ahead. 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 20-period Exponential Moving Average (EMA) at 1.1634 has acted as a major hurdle for the pound bulls. Also, the 50-EMA at 1.1661 is declining, which still favors a downside bias.
Meanwhile, the Relative Strength Index (RSI) is attempting to shift into the neutral range of 40.00-60.00 from the bearish range of 20.00-40.00 as exhaustion signals in the downside momentum are in play.
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.
Alternatively, a downside below Wednesday’s low near 1.1600 will drag the asset towards 19 March 2020 low at 1.1472. A breach of the latter will drag cable towards a 37-year low at 1.1410.
GBP/USD hourly chart
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