GBP/USD Price Analysis: Remains inside the woods ahead of US debt-ceiling talks

GBP/USD has come back inside the woods as investors have sidelined ahead of US borrowing cap issues.
US Biden believes that a deep dive into tax loopholes is necessary to ensure that the wealthy class should pay a fair amount of tax.
The Cable formed a Head and Shoulder pattern, which indicates a bearish reversal after a breakdown of the neckline placed from 1.2440.

Sagar Dua FXStreet

The GBP/USD pair is displaying a sideways auction in a range of 1.2420-1.2470 from Monday. The Cable is inside the woods as the investors are awaiting more developments over US debt-ceiling issues as each day passing is pushing the United States economy to a default situation.

S&P500 remained directionless on Monday as investors are expected to take decisive action after the face-to-face meeting between US President Joe Biden and House of Representatives Kevin McCarthy.

The US Dollar Index (DXY) has defended its immediate support of 103.20. Meanwhile, US Biden has cited that he believes Democrats will make progress on the debt-ceiling but a reduction in spending initiatives is needed. Also, a deep dive into tax loopholes is necessary to ensure that the wealthy class should pay a fair amount of tax.

GBP/USD witnessed a steep fall after a breakdown of the upward-sloping trendline plotted from April 03 low at 1.2275 on a four-hour scale. The Cable formed a Head and Shoulder pattern, which indicates a bearish reversal after a downside break below the neckline placed from April 27 low at 1.2440.

The Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, indicating a lackluster performance ahead of the US borrowing cap issues.

Should the asset decline below May 19 low at 1.2390, US Dollar bulls will get strengthened further and will drag the Cable toward April 10 low at 1.2344 followed by April 03 low at 1.2275.

On the flip side, a recovery move above May 09 high at 1.2640 will drive the major toward the round-level resistance at 1.2700 and 26 April 2022 high at 1.2772.

GBP/USD four-hour chart

GBP/USD

Overview
Today last price	1.2436
Today Daily Change	-0.0011
Today Daily Change %	-0.09
Today daily open	1.2447

Trends
Daily SMA20	1.2517
Daily SMA50	1.2411
Daily SMA100	1.227
Daily SMA200	1.1969

Levels
Previous Daily High	1.2484
Previous Daily Low	1.2392
Previous Weekly High	1.2547
Previous Weekly Low	1.2392
Previous Monthly High	1.2584
Previous Monthly Low	1.2275
Daily Fibonacci 38.2%	1.2449
Daily Fibonacci 61.8%	1.2427
Daily Pivot Point S1	1.2398
Daily Pivot Point S2	1.2349
Daily Pivot Point S3	1.2306
Daily Pivot Point R1	1.249
Daily Pivot Point R2	1.2533
Daily Pivot Point R3	1.2582

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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