GBP/USD Price Analysis: Drops below 1.2100 as risk-off impulse spikes further

The GBP/USD pair has surrendered the round-level support of 1.2100 in the Asian session. The Cable has witnessed selling pressure and has lost half of the gains added on Thursday. The downside pressure in the Pound Sterling has been triggered as investors have underpinned the risk-aversion theme ahead of the release of the United States Consumer Price Index (CPI).

The US Dollar Index has climbed above 103.04 as the street believes that January’s upbeat labor market data could propel a surprise rise in the inflation data to be released on Tuesday. Meanwhile, the Pound Sterling bulls will dance to the tunes of the United Kingdom’s preliminary Gross Domestic Product (GDP) (Q4) data.

GBP/USD has corrected to near the demand zone placed in a narrow range of 1.2090-1.2108 on a two-hour chart. The Cable has dropped after facing barricades around the 100-period Exponential Moving Average (EMA) at 1.2158, which adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has failed to sustain into the bullish range of 60.00-80.00, which indicates an absence of strength in the Pound Sterling bulls.

A further decline in the Cable below February 9 low at 1.2057 will drag the asset toward January 3 low at 1.1900 followed by horizontal support placed from January 6 low around 1.1841.

On the contrary, a break above January 24 low at 1.2263 will support a bullish reversal and will drive the Cable towards February 2 high around 1.2400. A breach of the latter will send the major toward January 23 high at 1.2448.

GBP/USD two-hour chart