GBP/USD Price Analysis: Rebounds as bearish channel target achieved, Fed awaited

GBP/USD stages a solid comeback amid risk-on mood, USD retreat.
Investors reposition ahead of the Fed and BOE event risks.
Cable achieved a bearish channel measured target; a rebound is inevitable.

Dhwani Mehta FXStreet

GBP/USD is hovering in the green zone for the first time in six trading days, bears seem to have faced exhaustion after a tumultuous week so far.

Cable is seeing fresh signs of life, helped by the return of risk appetite on upbeat Chinese activity data and as nervousness eases ahead of the expected 75 bps rate hike by the Fed.

In doing so, the currency pair extends the recovery towards 1.2050, adding 0.35% on the day, as of writing. The upbeat market mood has doused the ongoing rally in the safe-haven US dollar.

Additionally, investors resort to repositioning ahead of the critical Fed and BOE monetary policy decisions. The BOE Is widely expected to hike rates by 25 bps to 1.25% this Thursday, although the debate on the central bank’s rate hike path will hold the key for GBP bulls to sustain the recovery.

Looking at cable’s daily chart, a rebound seems to have some conviction as the price has already achieved the measured target of the rising channel breakdown at 1.1964.

The spot hit the lowest level since January 2020 at 1.1933 on Tuesday, having faced a double whammy from the aggressive Fed rate hike expectations and deepening fears about the future of the UK economy.

The Relative Strength Index (RSI) has now managed to come out of the oversold territory, trading at 30.71, backing the renewed uptick in GBP/USD.

Recapturing the 1.2050 psychological level is critical to unleashing the additional recovery towards 1.2100, above which doors will open up once again towards 1.2200.

GBP/USD: Daily chart

On the flip side, the immediate support now awaits at the 1.2000 round figure.

Fresh selling will see the channel target being tested again at 1.1964, below which the multi-month lows of 1.1933 will be back in focus.

GBP/USD: Additional technical levels

GBP/USD

Overview
Today last price	1.2038
Today Daily Change	0.0042
Today Daily Change %	0.35
Today daily open	1.1997

Trends
Daily SMA20	1.2481
Daily SMA50	1.2609
Daily SMA100	1.297
Daily SMA200	1.3253

Levels
Previous Daily High	1.2208
Previous Daily Low	1.1934
Previous Weekly High	1.2599
Previous Weekly Low	1.2301
Previous Monthly High	1.2667
Previous Monthly Low	1.2155
Daily Fibonacci 38.2%	1.2039
Daily Fibonacci 61.8%	1.2103
Daily Pivot Point S1	1.1884
Daily Pivot Point S2	1.1772
Daily Pivot Point S3	1.1609
Daily Pivot Point R1	1.2159
Daily Pivot Point R2	1.2321
Daily Pivot Point R3	1.2433

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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