GBP/USD Price Analysis: Mean reversion to 20-EMA looks imminent

Sour market sentiment has dragged the Cable below 1.2200.
An oscillation in the bullish range by the RSI (14) indicates that the bullish momentum is still solid.
A mean reversion to the 20-EMA around 1.1970 is highly expected.

Sagar Dua FXStreet

The GBP/USD pair has sensed barricades around the immediate hurdle of 1.2200 in the early Tokyo session. The three-day winning streak of the Cable ended on Monday after it failed to extend its rally above 1.2340. A cautious market mood hammered the Pound Sterling and sent it to lower below the round-level cushion of 1.2200.

Meanwhile, the US Dollar Index (DXY) has witnessed a significant buying interest and has advanced to near 105.40 after refreshing its fresh- foe-month low at 104.10.

On a daily scale, Cable has faced selling pressure after testing the supply zone placed in a narrow range of 1.2292-1.2351. The gap between the Cable and the 20-period Exponential Moving Average (EMA) has escalated, therefore, a mean reversion cannot be ruled out. The Cable is still holding the 200-EMA at 1.2108, which indicates that the long-term trend is still bullish.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the bullish momentum is still active.

Going forward, a decline below Friday’s low at 1.2134 will drag the Cable toward the psychological resistance at 1.2000, followed by the 20-EMA around 1.1971.

On the flip side, a break above Monday’s high at 1.2345 will drive the Cable toward June 16 high of around 1.2400. A breach of the latter will send the major toward June 1 low at 1.2460.

GBP/USD daily chart

GBP/USD

Overview
Today last price	1.2187
Today Daily Change	-0.0096
Today Daily Change %	-0.78
Today daily open	1.2283

Trends
Daily SMA20	1.1885
Daily SMA50	1.1503
Daily SMA100	1.1656
Daily SMA200	1.2149

Levels
Previous Daily High	1.23
Previous Daily Low	1.2134
Previous Weekly High	1.2311
Previous Weekly Low	1.19
Previous Monthly High	1.2154
Previous Monthly Low	1.1147
Daily Fibonacci 38.2%	1.2237
Daily Fibonacci 61.8%	1.2198
Daily Pivot Point S1	1.2178
Daily Pivot Point S2	1.2073
Daily Pivot Point S3	1.2012
Daily Pivot Point R1	1.2344
Daily Pivot Point R2	1.2405
Daily Pivot Point R3	1.251

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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