GBP/USD Price Analysis: A pullback toward the 20-EMA sense an optimal buy

A sheer upside after a double bottom formation has advocated a strong reversal.
A loud move displayed by the RSI (14) is expressing a shift in the dominance.
Pound bulls are offering a bargain buy to investors after a pullback at 20-EMA.

Sagar Dua FXStreet

The GBP/USD pair is facing corrective action after a juggernaut rally from Wednesday’s low at 1.2973. The cable has been corrected to a near 20-period Exponential Moving Average (EMA) and is providing an optimal opportunity for the pound investors to enter a firmer reversal.

A double bottom formation on a four-hour scale seems lucrative for the cable bulls. The pair has displayed a sheer upside after retesting March’s lows at around the psychological support of 1.3000. The double bottom chart pattern signifies a bullish reversal amid the absence of high-volume sellers while r-testing the critical bottom. The trendline placed from March 3 high at 1.3418, adjoining the March 23 high at 1.3299 will continue to act as a major barricade.

A loud move in the momentum oscillator, Relative Strength Index (RSI) (14) is indicating a shift from the dominance of bears.

A corrective pullback towards the 20-EMA at 1.3068 looks like an optimal buy for investors. This will drive the asset towards the round level resistance at 1.3100, followed by the 200-EMA at 1.3165.

On the flip side, a drop below the April 8 low at 1.2982 will trigger the greenback bulls, which will send the asset towards the 2 November 2020 low and the round level support at 1.2854 and 1.2800 respectively.

GBP/USD four-hour chart

GBP/USD

Overview
Today last price	1.3069
Today Daily Change	-0.0003
Today Daily Change %	-0.02
Today daily open	1.3072

Trends
Daily SMA20	1.3116
Daily SMA50	1.3271
Daily SMA100	1.3352
Daily SMA200	1.3526

Levels
Previous Daily High	1.3147
Previous Daily Low	1.3034
Previous Weekly High	1.3167
Previous Weekly Low	1.2982
Previous Monthly High	1.3438
Previous Monthly Low	1.3
Daily Fibonacci 38.2%	1.3077
Daily Fibonacci 61.8%	1.3104
Daily Pivot Point S1	1.3021
Daily Pivot Point S2	1.2971
Daily Pivot Point S3	1.2908
Daily Pivot Point R1	1.3135
Daily Pivot Point R2	1.3198
Daily Pivot Point R3	1.3248

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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