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

  • GBP/USD has slipped below the crucial support of 1.2100 amid the risk-aversion theme.
  • The Pound Sterling bulls will dance to the tunes of the UK’s preliminary GDP (Q4) data.
  • A downside move below the demand zone by the Cable indicates weakness ahead.

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

GBP/USD

Overview
Today last price1.2094
Today Daily Change-0.0022
Today Daily Change %-0.18
Today daily open1.2116
 
Trends
Daily SMA201.2266
Daily SMA501.2191
Daily SMA1001.1833
Daily SMA2001.1947
 
Levels
Previous Daily High1.2194
Previous Daily Low1.2057
Previous Weekly High1.2418
Previous Weekly Low1.205
Previous Monthly High1.2448
Previous Monthly Low1.1841
Daily Fibonacci 38.2%1.2142
Daily Fibonacci 61.8%1.2109
Daily Pivot Point S11.2051
Daily Pivot Point S21.1986
Daily Pivot Point S31.1914
Daily Pivot Point R11.2188
Daily Pivot Point R21.2259
Daily Pivot Point R31.2325

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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