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GBP/USD Price Analysis: Bearish kicker candlestick favors a reversal

  • BOE’S dovish guidance has snapped a four-day rally in the Cable.
  • A Bearish Kicker candlestick pattern that indicates a reversal after an upside trend.
  • The RSI (14) has slipped into the 40.00-60.00 range, which indicates a loss in the upside momentum.

The GBP/USD pair has witnessed a rebound after dropping to near 1.2156 on Thursday. The cable went through a sheer sell-off after the Bank of England (BOE) Governor Andrew Bailey sounded dovish on interest rate guidance after hiking current borrowing cost by 50 basis points (bps) to 3.50%.

Meanwhile, the US Dollar Index (DXY) has corrected in its early trade to near 104.45 amid negative market sentiment. Investors have underpinned THE risk aversion theme amid rising recession fears after a hawkish Federal Reserve (Fed) policy.

On a daily scale, the Cable has formed a Bearish Kicker candlestick pattern that indicates a reversal after an upside trend. Sheer volatility in the Pound Sterling has snapped a four-day rally in the Cable. The 20-period Exponential Moving Average (EMA) at 1.2115 has not been tested yet, therefore the short-term trend is still solid.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range from the bullish range of 60.00-80.00, which indicates a loss in the upside momentum.

Investors might see selling pressure near the round-level resistance of 1.2200, which will drag the asset toward December 7 low at 1.2107. A breakdown of the latter will expose the Cable for more downside toward November 15 high at 1.2029.

For an upside move, the Cable needs to surpass December 5 high of around 1.2344, which will drive the asset toward Tuesday’s high at 1.2444, followed by the psychological resistance at 1.2500.

GBP/USD daily chart

GBP/USD

Overview
Today last price1.2193
Today Daily Change0.0015
Today Daily Change %0.12
Today daily open1.2178
 
Trends
Daily SMA201.2131
Daily SMA501.1711
Daily SMA1001.1675
Daily SMA2001.2105
 
Levels
Previous Daily High1.2434
Previous Daily Low1.2156
Previous Weekly High1.2345
Previous Weekly Low1.2107
Previous Monthly High1.2154
Previous Monthly Low1.1147
Daily Fibonacci 38.2%1.2262
Daily Fibonacci 61.8%1.2328
Daily Pivot Point S11.2078
Daily Pivot Point S21.1978
Daily Pivot Point S31.18
Daily Pivot Point R11.2356
Daily Pivot Point R21.2534
Daily Pivot Point R31.2634

Author

Sagar Dua

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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