GBP/USD Price Analysis: Upside looks favored amid inventory accumulation around 1.2050

The Cable is displaying a sideways auction ahead of US Employment data.
Investors’ risk appetite has trimmed as S&P500 futures are facing immense heat.
The RSI (14) has slipped into the 40.00-60.00 range, which indicates a consolidation ahead.

Sagar Dua FXStreet

The GBP/USD pair is displaying topsy-turvy moves around 1.2050 in the Asian session. The Cable asset has turned sideways as investors are awaiting the release of the Automatic Data Processing (ADP) Employment data, which is scheduled for Thursday before the release of the United States Nonfarm Payrolls (NFP) data.

A significant drop in investors' risk appetite as investors are dumping S&P500 futures could also lead to volatility in risk-perceived currencies. The US Dollar Index (DXY) has attempted a recovery after dropping to near 103.69.

On an hourly scale, the Cable is showing an inventory adjustment process below the horizontal resistance plotted from December 27 high around 1.2100. The inventory adjustment in a 1.2014-1.2088 range seems to be an accumulation one as the asset witnessed a responsive buying action around 1.1900 on Tuesday, making it a platform for a follow-up buying ahead.

The 20-and 50-period Exponential Moving Averages (EMAs) have delivered a bull cross at 1.2019, which adds to the upside filters.

While the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range, which indicates a consolidation ahead.

For an upside move, the Pound Sterling needs to push the Cable decisively above December 27 high around 1.2100, which will drive the major towards December 21 high at 1.2147 followed by December 21 high around 1.2200.

On the contrary, a downside move below the round-level support at 1.1900 will drag the major toward November 11 high at 1.1855. A slippage below the latter will expose Cable to November 21 low around 1.1778.

GBP/USD hourly chart

GBP/USD

Overview
Today last price	1.2044
Today Daily Change	-0.0015
Today Daily Change %	-0.12
Today daily open	1.2059

Trends
Daily SMA20	1.2136
Daily SMA50	1.194
Daily SMA100	1.1666
Daily SMA200	1.203

Levels
Previous Daily High	1.2088
Previous Daily Low	1.1958
Previous Weekly High	1.2126
Previous Weekly Low	1.2002
Previous Monthly High	1.2447
Previous Monthly Low	1.1992
Daily Fibonacci 38.2%	1.2038
Daily Fibonacci 61.8%	1.2007
Daily Pivot Point S1	1.1982
Daily Pivot Point S2	1.1905
Daily Pivot Point S3	1.1852
Daily Pivot Point R1	1.2112
Daily Pivot Point R2	1.2165
Daily Pivot Point R3	1.2242

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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