GBP/USD Price Analysis: Pound bulls get strengthens on double-bottom formation at around 1.3000
- Pound bulls are witnessing wider ticks after exploding the consolidation formed in a 1.2982-1.3058 range.
- A double-bottom formation has driven the cable strongly to near 1.3120.
- The loud move on the RSI (14) is indicating a bullish bias ahead.
The GBP/USD pair is experiencing a strong upside after the successful re-test of its critical bottom at 1.3000. The cable has witnessed a vertical positive move after breaking out of the consolidation formed in a range of 1.2982-1.3058.
On a four-hour scale, GBP/USD has bounced sharply after a double bottom formation. Usually, the mentioned chart pattern indicates weak selling pressure on a critical bottom formed earlier. The pair has displayed a sheer upside after retesting March’s lows at around the psychological support of 1.3000. The trendline placed from March 3 high at 1.3418, adjoining the March 23 high at 1.3299 will continue to act as a major barricade.
The 20- and 50-period Exponential Moving Averages (EMAs) at 1.3045 and 1.3062 respectively have turned upside, which signals a firmer reversal.
Meanwhile, the Relative Strength Index (RSI) (14) has displayed a loud move as the momentum oscillator has climbed above 60.00, which indicates a bullish reversal.
A corrective pullback towards the 50-EMA at 1.3062 will be a bargain buy for the market participants. This will send the asset towards Thursday’s high at 1.3123, followed by April’s high at 1.3167.
However, a decisive plunge below Friday’s low at 1.2982 will trigger the greenback bulls, which will drag the asset towards the 2 November 2020 low and the round level support at 1.2854 and 1.2800 respectively.
GBP/USD four-hour chart
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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.
