GBP/USD Price Analysis: Rising wedge, bearish RSI divergence lure sellers ahead of UK inflation

GBP/USD grinds near five-week high inside bearish chart formation.
Divergence between higher-high on prices and lower high on RSI (14) tease sellers.
Upside break of 1.2345 could defy the bearish signals and challenge previous monthly top.
UK Inflation may disappoint pair buyers amid mixed forecasts.

Anil Panchal FXStreet

GBP/USD picks up bids to defend the previous day’s run-up around the 1.2300 round figure, despite posting only 0.08% intraday gains, as the Cable pair traders await the UK’s key inflation data on early Wednesday. Even so, the quote stays inside an eight-day-old rising wedge bearish chart formation.

Not only the rising wedge but bearish RSI (14) divergence also keeps the GBP/USD sellers hopeful. That said, the oscillator’s inability to back the higher-high on prices portrays the bearish RSI divergence.

However, the quote’s current upside could lure GBP/USD buyers if the scheduled UK data offers a positive surprise and allow the pair to cross the stated wedge’s upper line, close to 1.2325 by the press time.

Following that, the mid-December 2022 low around 1.2345 may probe GBP/USD bulls before directing them toward the previous monthly peak surrounding 1.2445.

Alternatively, pullback moves need validation from the 200-SMA level of 1.2153 while the aforementioned wedge’s lower line, near 1.2200 at the latest, restricts the quote’s immediate downside.

It’s worth noting, however, that the GBP/USD weakness past 1.2153 won’t hesitate to refresh the monthly low, currently around 1.1840.

GBP/USD: Four-hour chart

Trend: Further downside expected

Additional important levels

Overview
Today last price	1.2285
Today Daily Change	0.0006
Today Daily Change %	0.05%
Today daily open	1.2279

Trends
Daily SMA20	1.2095
Daily SMA50	1.2066
Daily SMA100	1.1699
Daily SMA200	1.1989

Levels
Previous Daily High	1.23
Previous Daily Low	1.2169
Previous Weekly High	1.2249
Previous Weekly Low	1.2086
Previous Monthly High	1.2447
Previous Monthly Low	1.1992
Daily Fibonacci 38.2%	1.225
Daily Fibonacci 61.8%	1.2219
Daily Pivot Point S1	1.2199
Daily Pivot Point S2	1.2119
Daily Pivot Point S3	1.2069
Daily Pivot Point R1	1.233
Daily Pivot Point R2	1.238
Daily Pivot Point R3	1.246

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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