GBP/USD Price Analysis: Eyes further recovery above 1.2630 as US debt ceiling talks end without conclusion
|- GBP/USD is looking to extend its recovery above 1.2630 as US debt ceiling negotiations ended without outcome.
- The Pound Sterling will remain in action ahead of the interest rate decision by the BoE.
- GBP/USD has rebounded after testing the breakout region near 1.2600 of the Rising Channel pattern.
The GBP/USD pair is looking to extend its recovery above the immediate resistance of 1.2630 in the early Tokyo session. The Cable is getting some traction as the ending of the US debt ceiling talks without any conclusion has increased uncertainty.
US President Joe Biden cited that Speaker Kevin McCarthy was not ready to approve default off the table. Further discussions will take place on Friday, which gets US inflation back into a major highlight. The US Dollar Index (DXY) extended its recovery to near 101.65 on expectations that the US inflation would remain stubborn further.
Meanwhile, the Pound Sterling will remain in action ahead of the interest rate decision by the Bank of England (BoE), which is scheduled for Thursday. BoE Governor Andrew Bailey is expected to raise interest rates further by 25 basis points (bps) to 4.50%.
GBP/USD has rebounded after testing the breakout region near 1.2600 of the Rising Channel chart pattern formed on a two-hour scale. A confident test of the Rising Channel breakout has stemmed confidence over the strength in the breakout.
The 50-period Exponential Moving Average (EMA) at 1.2600 is providing cushion to the Pound Sterling bulls.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range after a mild correction. An upside break into the 60.00-80.00 range will activate the bullish momentum.
Further recovery above May 09 high at 1.2640 will drive the major toward the round-level resistance at 1.2700 followed by 26 April 2022 high at 1.2772.
On the flip side, a reversal move below May 05 low at 1.2561 will drag the Cable toward April 26 high at 1.2515 and May 02 low at 1.2436.
GBP/USD two-hour chart
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