GBP/USD Price Analysis: Downside towards 1.2100 is on cards

A usual corrective move may drag the cable towards 1.2100.
The 50-EMA at 1.2129 is still untouched but is likely to get tested sooner.
A range shift by the RSI (14) to 40.00-60.00 indicates that the cable has surrendered the upside momentum.

Sagar Dua FXStreet

The GBP/USD pair has corrected to near 1.2140 after surrendering the critical support of 1.2180 on Tuesday. The cable witnessed an extreme sell-off on Tuesday after failing to recapture monthly highs at 1.2293. A corrective move is likely to expand further as investors have underpinned risk-off impulse due to escalating US-China tensions over Taiwan.

On a four-hour scale, the cable is auctioning in a Rising Channel formation that favors a north-side on a broader note but faces various healthy corrections in the upside journey. The upper portion of the above-mentioned chart pattern is placed from July 13 high at 1.1968 while the lower portion is plotted from July 14 low at 1.1760.

The asset has surrendered the 20-period Exponential Moving Average (EMA) at 1.2190 while the 50-EMA at 1.2129 is still untouched but is likely to be tested sooner.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range, which indicates that gold prices are not carrying bullish momentum for a while.

A minor pullback towards 1.2150 will be a bargain sell for the market participants. This will drag the cable towards the round-level support at 1.2100. A decisive slippage below 1.2100 will unleash the greenback bulls and the cable will drag further to July 29 low at 1.2063.

On the flip side, the cable may start a fresh bullish impulsive wave if the asset oversteps the 20-EMA at 1.2190. An occurrence of the same will drive the asset towards July 29 high at 1.2246, followed by a monthly high at 1.2294.

GBP/USD four-hour chart

GBP/USD

Overview
Today last price	1.2151
Today Daily Change	-0.0098
Today Daily Change %	-0.80
Today daily open	1.2249

Trends
Daily SMA20	1.2
Daily SMA50	1.2216
Daily SMA100	1.2518
Daily SMA200	1.2981

Levels
Previous Daily High	1.2294
Previous Daily Low	1.2157
Previous Weekly High	1.2246
Previous Weekly Low	1.196
Previous Monthly High	1.2246
Previous Monthly Low	1.176
Daily Fibonacci 38.2%	1.2242
Daily Fibonacci 61.8%	1.2209
Daily Pivot Point S1	1.2173
Daily Pivot Point S2	1.2097
Daily Pivot Point S3	1.2037
Daily Pivot Point R1	1.2309
Daily Pivot Point R2	1.237
Daily Pivot Point R3	1.2446

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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