GBP/USD Price Analysis: Pound bulls test H&S neckline around 1.2050

A test of H&S formation has sidelined the retail participants.
Declining 20-and 50-EMAs add to the downside filters.
A drop below 40.00 by the RSI (14) will trigger the downside momentum.

Sagar Dua FXStreet

The GBP/USD pair is displaying back and forth moves in a narrow range of 1.2048-1.2080 in the early Tokyo session. The cable has displayed a pullback move after dropping near the psychological support of 1.2000 on Friday. Pound bulls are failing to gain strength and are likely to remain on the tenterhooks.

A test of a Head and Shoulder formation on an hourly scale has kept the investors on the sidelines. Usually, the above-mentioned pattern indicates a bearish reversal after a prolonged positive move in the asset. The neckline of the chart pattern is marked from July 29 low at 1.2063.

The 20-and 50-period Exponential Moving Averages (EMAs) at 1.2090 and 1.2120 respectively are declining sharply, which adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating around 40.00 and may display a sheer downside move on its violation.

A downside move below Monday’s low at 1.2050 will drag the cable towards the psychological support at 1.2000, followed by July 16 low at 1.964.

Alternatively, the pound bulls could regain their mojo and may drive the asset higher towards the August 3 low and high at 1.2135 and 1.2200 after violating the 20-EMA at 1.2090.

GBP/USD hourly chart

GBP/USD

Overview
Today last price	1.2075
Today Daily Change	0.0019
Today Daily Change %	0.16
Today daily open	1.2056

Trends
Daily SMA20	1.2031
Daily SMA50	1.218
Daily SMA100	1.2478
Daily SMA200	1.2949

Levels
Previous Daily High	1.2164
Previous Daily Low	1.2003
Previous Weekly High	1.2294
Previous Weekly Low	1.2003
Previous Monthly High	1.2246
Previous Monthly Low	1.176
Daily Fibonacci 38.2%	1.2065
Daily Fibonacci 61.8%	1.2102
Daily Pivot Point S1	1.1985
Daily Pivot Point S2	1.1914
Daily Pivot Point S3	1.1825
Daily Pivot Point R1	1.2146
Daily Pivot Point R2	1.2235
Daily Pivot Point R3	1.2306

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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