GBP/USD Price Analysis: Establishment above 1.2000 is a prerequisite for further upside

Upbeat market sentiment has strengthened the Pound Sterling.
A breakout of a VCP results in wider ticks formation and heavy volume.
The formation of a Rising Channel indicates that the broader trend is towards the north.

Sagar Dua FXStreet

The GBP/USD pair is displaying a sideways performance in the early Tokyo session after a juggernaut rally to near 1.2080. The Cable witnessed an immense buying interest after sustaining above the round-level resistance of 1.1900. A significant improvement in investors’ risk appetite strengthened the Pound Sterling.

Meanwhile, the US dollar index (DXY) has dropped 106.00 despite a firmer jump in the US Durable Goods Order data. It seems that less-hawkish cues on interest rate guidance from the Federal Open Market Committee (Fed) minutes have impacted the US Dollar. Investors should know that US markets are closed today on account of Thanksgiving Day.

On a daily scale, the Cable has delivered a breakout of a Volatility Contraction Pattern (VCP) that results in the formation of wider ticks and heavy volume. Broadly, a Rising Channel formation satisfies the condition of a long-term upside trend. Also, advancing the 20-period Exponential Moving Average (EMA) at 1.1738 adds to the upside filters.

Adding to that, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the upside momentum is active.

Going forward, the mighty 200-period EMA at 1.2110 could be a hurdle for the Pound Sterling bulls.

For further upside, the asset is required to establish firmly above the psychological resistance of 1.2000. But for a run-up, the Cable is needed to overstep the 200-EMA at 1.2110 firmly, which will drive GBP/USD towards the round-level resistance of 1.2200, followed by August 2 high at 1.2280.

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 daily chart

GBP/USD

Overview
Today last price	1.2051
Today Daily Change	0.0161
Today Daily Change %	1.35
Today daily open	1.189

Trends
Daily SMA20	1.1632
Daily SMA50	1.138
Daily SMA100	1.1641
Daily SMA200	1.2207

Levels
Previous Daily High	1.1903
Previous Daily Low	1.1814
Previous Weekly High	1.2029
Previous Weekly Low	1.171
Previous Monthly High	1.1646
Previous Monthly Low	1.0924
Daily Fibonacci 38.2%	1.1869
Daily Fibonacci 61.8%	1.1848
Daily Pivot Point S1	1.1835
Daily Pivot Point S2	1.178
Daily Pivot Point S3	1.1746
Daily Pivot Point R1	1.1924
Daily Pivot Point R2	1.1958
Daily Pivot Point R3	1.2013

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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