GBP/USD Price Analysis: Darvas Box favors volatility expansion above 1.2600

Overlapping of the 200-EMA with the cable price adds to the consolidation filters.
The Darvas Box formation is hitting for an extreme squeeze in volatility.
A 40.00-60.00 range by the RSI (14) is indicating the unavailability of momentum in the counter.

Sagar Dua FXStreet

The GBP/USD pair is oscillating in a narrow range of 1.2530-1.2550 in Tokyo. On Wednesday, the cable witnessed a responsive selling action after attempting to overstep the critical hurdle of 1.2600. A balanced market profile is indicating a consolidative move ahead.

The formation of a Darvas Box chart pattern on an hourly scale is indicating a squeeze in the standard deviation. The asset is trading back and forth in a range of 1.2430-1.2600 for the past two weeks. Usually, a Darvas box formation after a vertical upside move dictates the presence of initiative buyers, which holds the potential of driving the asset higher.

The 200-period Exponential Moving Average (EMA) at 1.2544 is overlapping with the cable price, which firms the odds of consolidation ahead.

Also, the Relative Strength Index (RSI) (14) in the 40.00-60.00 range is hoping for a continuation of a lackluster performance.

An upside break of the Darvas Box above weekly highs at 1.2600 will send the asset towards May’s high and the round-level resistance at 1.2667 and 1.2700 respectively.

On the contrary, the pound bulls could lose their grip if the asset drops below Tuesday’s low at 1.2430. This will drag the major towards May 11 high at 1.2400 followed by May 18 low at 1.2280.

GBP/USD hourly chart

GBP/USD

Overview
Today last price	1.2541
Today Daily Change	0.0002
Today Daily Change %	0.02
Today daily open	1.2539

Trends
Daily SMA20	1.2498
Daily SMA50	1.2679
Daily SMA100	1.3022
Daily SMA200	1.3285

Levels
Previous Daily High	1.2598
Previous Daily Low	1.2513
Previous Weekly High	1.266
Previous Weekly Low	1.2458
Previous Monthly High	1.2667
Previous Monthly Low	1.2155
Daily Fibonacci 38.2%	1.2545
Daily Fibonacci 61.8%	1.2565
Daily Pivot Point S1	1.2502
Daily Pivot Point S2	1.2466
Daily Pivot Point S3	1.2418
Daily Pivot Point R1	1.2586
Daily Pivot Point R2	1.2634
Daily Pivot Point R3	1.2671

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.

EUR/USD looks to regain the 200-day SMA

EUR/USD regains some balance and trade just above 1.1600 the figure ahead of the opening bell in Asia. The pair initially dipped to the 1.1530 zone for the first time since November, always following the stronger US Dollar and the marked flight-to-safety in the context of the ongoing Middle East crisis

GBP/USD attacks 1.3300, refreshing three-month lows

GBP/USD is deep in the red near 1.3300, accelerating its downside to renew three-month lows in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar capitalizes on increased haven demand.

Gold bounces off lows, back above $5,100

Gold remains on the defensive, eroding part of the recent multi-day advance and managing to trade back above the $5,100 mark per troy ounce on Tuesday. The precious metal initially dropped just below the critical $5,000 threshold on the back of the persistent strength of the Greenback, higher US Treasury yields across the curve and investors' repricing of Fed rate cuts.