- A breakout of a symmetrical triangle states an expansion in volatility that results in wider ticks and heavy volume.
- Advancing 20-and 50-EMAs indicate more upside ahead.
- The RSI (14) has shifted into the bullish range of 60.00-80.00, which adds to the upside filters.
The GBP/USD pair has refreshed its three-day high at 1.1903 in the early Asian session as investors’ risk appetite is improving dramatically. The Cable is expected to display more gains as the US dollar index (DXY) is facing sheer pressure due to a significant recovery in the risk-on profile.
The DXY witnessed a steep fall after failing to recapture the round-level resistance of 108.00. Volatility in the DXY counter is expected to remain at the rooftop as investors eye the release of Federal Open Market Committee (FOMC) minutes and the US Durable Goods Orders.
On an hourly scale, the Cable has delivered a breakout of the Symmetrical Triangle chart pattern, which will result in wider ticks and heavy volume. The asset is surpassed the downward-sloping trendline plotted from November 15 high at 1.2029 while the upward-sloping trendline of the chart pattern is placed from November 14 low at 1.1710.
The asset is auctioning above the 20-and 50-period Exponential Moving Averages (EMAs) at 1.1876 and 1.1863 respectively, which adds to the upside filters.
Also, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which favors a bullish momentum.
For a decisive upside, the Cable needs to break Friday’s high at 1.1950, which will drive the asset towards November 15 high at 1.2029, followed by the round-level resistance at 1.2100.
On the flip side, a drop below Monday’s low at 1.1780 will drag the asset toward November 14 low at 1.1710. A slippage below November 14 low will expose the asset to the horizontal support plotted from October 27 high at 1.1646.
GBP/USD hourly chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD could extend the recovery to 0.6500 and above
The enhanced risk appetite and the weakening of the Greenback enabled AUD/USD to build on the promising start to the week and trade closer to the key barrier at 0.6500 the figure ahead of key inflation figures in Australia.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Federal Reserve might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.