- The heat of the risk-aversion theme has dragged the Cable below 1.2230.
- No trend can be undisputed for a secular period, therefore, a corrective move to near the 20-EMA cannot be ruled out.
- The RSI (14) has shown signs of deceleration in the upside momentum.
The GBP/USD pair has extended its losses below 1.2230 in the Asian session after failing to sustain above the round-level resistance of 1.2300. The Cable is facing the heat of risk-aversion theme as investors are getting anxious ahead of the monetary policy announcement by the Federal Reserve (Fed) and the Bank of England (BOE).
The US Dollar Index (DXY) has climbed firmly to near 105.20 in Tokyo and is expected to extend gains further amid an improvement in safe-haven’s appeal. Meanwhile, the 10-year US Treasury yields are hovering above 3.5%.
On a daily scale, the Cable is continuously moving north and has not displayed a mean-reversion to near 20-period Exponential Moving Average (EMA). No trend can be undisputed for a secular period, therefore, a corrective move to near the 20-EMA cannot be ruled out. Also, the Pound Sterling has shown signs of exhaustion in the upside trend.
The Cable is auctioning above the 200-EMA at 1.2116, which indicates that the upside trend is still intact.
Meanwhile, a continuous oscillation in the bullish range of 60.00-80.00 by the Relative Strength Index (RSI) (14) is showing signs of overbought.
Should the Cable drops below Friday’s low around 1.2200, the US Dollar bulls will drag the asset towards the 200-EMA at 1.2116 and the 20-EMA at 1.2050.
On the contrary, a decisive break above December 5 high at 1.2345 will drive the asset toward the round-level resistance at 1.2400, followed by the psychological resistance at 1.2500.
GBP/USD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0800 as USD weakens
EUR/USD has gained traction and advanced toward 1.0800 in the early American session on Monday. The positive opening witnessed in Wall Street makes it difficult for the US Dollar to find demand and helps the pair continue to push higher.
GBP/USD closes in on 1.2300 as mood improves
GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.
Gold: XAU/USD pared losses and consolidates around $1,950.00 Premium
Spot gold trades in the $1,950 price zone, sharply down on Monday as investors move away from safe-haven assets. The sentiment is positive at the start of the week amid easing concerns related to a global banking crisis.
MicroStrategy buys $150 million worth of Bitcoin as institutional interest soars to eight-month high
Bitcoin has been noting increasing institutional interest for the last few days as whale movement on the network grew.
Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk
BABA shareholders begin the week with a glimmer of hope after founder Jack Ma was seen visiting China after spending more than one year abroad. The report originally led to Alibaba's shares in Hong Kong rising 4% before subsiding.