GBP/USD Price Analysis: Needs to spend more time amid volatility contraction

A minor rebound in risk-off impulse has dragged the cable below 1.1300.
The DXY has reclaimed the critical resistance of 112.00.
A symmetrical triangle formation indicates a consolidation head.

Sagar Dua FXStreet

The GBP/USD pair has witnessed mild selling pressure and has dropped below the critical support of 1.1300 in the early European session. A soft decline in the S&P500 futures has delivered a rebound in the risk-off profile. The US dollar index (DXY) has reclaimed the critical resistance of 112.00 and has also delivered an upside break of the morning consolidation range.

On an hourly scale, the cable is oscillating in a Symmetrical Triangle chart pattern that signals a volatility contraction. The upward-sloping trendline of the chart pattern is placed from October 12 low at 1.0924 while the downward-sloping trendline is plotted from October 5 high at 1.1496.

The 50-period Exponential Moving Average (EMA) at 1.1291 is overlapping with the asset, which indicated a rangebound structure.

Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates the unavailability of a potential trigger.

Going forward, an upside break of October 17 high at 1.1440 will drive the cable towards September 14 high at 1.1590, followed by September 13 high at 1.1738.

On the flip side, a drop below Friday’s low at 1.1060 will drag the asset toward the psychological support of 1.1000. If cable surrenders the psychological support, it will expose to more downside towards October 12 low at 1.0924.

GBP/USD hourly chart

GBP/USD

Overview
Today last price	1.1278
Today Daily Change	-0.0002
Today Daily Change %	-0.02
Today daily open	1.128

Trends
Daily SMA20	1.118
Daily SMA50	1.1413
Daily SMA100	1.1771
Daily SMA200	1.2407

Levels
Previous Daily High	1.1409
Previous Daily Low	1.1258
Previous Weekly High	1.144
Previous Weekly Low	1.106
Previous Monthly High	1.1738
Previous Monthly Low	1.0339
Daily Fibonacci 38.2%	1.1316
Daily Fibonacci 61.8%	1.1352
Daily Pivot Point S1	1.1222
Daily Pivot Point S2	1.1165
Daily Pivot Point S3	1.1071
Daily Pivot Point R1	1.1373
Daily Pivot Point R2	1.1467
Daily Pivot Point R3	1.1524

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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