GBP/USD Price Analysis: Upside looks favored amid inventory accumulation around 1.2050
|- The Cable is displaying a sideways auction ahead of US Employment data.
- Investors’ risk appetite has trimmed as S&P500 futures are facing immense heat.
- The RSI (14) has slipped into the 40.00-60.00 range, which indicates a consolidation ahead.
The GBP/USD pair is displaying topsy-turvy moves around 1.2050 in the Asian session. The Cable asset has turned sideways as investors are awaiting the release of the Automatic Data Processing (ADP) Employment data, which is scheduled for Thursday before the release of the United States Nonfarm Payrolls (NFP) data.
A significant drop in investors' risk appetite as investors are dumping S&P500 futures could also lead to volatility in risk-perceived currencies. The US Dollar Index (DXY) has attempted a recovery after dropping to near 103.69.
On an hourly scale, the Cable is showing an inventory adjustment process below the horizontal resistance plotted from December 27 high around 1.2100. The inventory adjustment in a 1.2014-1.2088 range seems to be an accumulation one as the asset witnessed a responsive buying action around 1.1900 on Tuesday, making it a platform for a follow-up buying ahead.
The 20-and 50-period Exponential Moving Averages (EMAs) have delivered a bull cross at 1.2019, which adds to the upside filters.
While the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range, which indicates a consolidation ahead.
For an upside move, the Pound Sterling needs to push the Cable decisively above December 27 high around 1.2100, which will drive the major towards December 21 high at 1.2147 followed by December 21 high around 1.2200.
On the contrary, a downside move below the round-level support at 1.1900 will drag the major toward November 11 high at 1.1855. A slippage below the latter will expose Cable to November 21 low around 1.1778.
GBP/USD hourly chart
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