GBP/USD Price Analysis: Volatility contracts amid quiet market mood, 1.1800 a key support


  • The formation of a symmetrical triangle indicates a consolidation ahead.
  • Overlapping short-to-medium-term EMAs signals a volatility contraction.
  • Quiet market mood is keeping the risk-perceived assets in a rangebound structure.

The GBP/USD pair turned sideways in the early Tokyo session after attempting a rebound below the critical support of 1.1800. The Cable is looking to extend its recovery above 1.1820 as risk-perceived currencies are gaining some traction in a quiet market mood.

Meanwhile, the US dollar index (DXY) is hovering around 107.80 after a bullish Monday. Apart from that, the 10-year US Treasury yields also rebounded to near 3.83% despite bleak chances of continuation of the 75 basis points (bps) rate hike structure by the Federal Reserve (Fed).

A formation of a Symmetrical Triangle on an hourly scale is indicating a volatility contraction. The upward-sloping trendline of the chart pattern is placed from November 14 low at 1.1710 while the downward-sloping trendline is plotted from November 15 high at 1.2029. A breakout of the same will result in wider ticks and heavy volume.

The 20-and 50-period Exponential Moving Averages (EMAs) are overlapping with each other, which signals a consolidation ahead.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into 40.00-60.00, which indicates the unavailability of a fresh trigger for decisive action ahead.

Going forward, a break above Friday’s high at 1.1950 will drive Cable towards November 15 high at 1.2029, followed by the round-level resistance at 1.2100.

On the flip side, a drop below Monday’s low at 1.1780 will drag the asset toward November 14 low at 1.1710. A slippage below November 14 low will expose the asset to the horizontal support plotted from October 27 high at 1.1646.

GBP/USD hourly chart

GBP/USD

Overview
Today last price 1.1822
Today Daily Change -0.0062
Today Daily Change % -0.52
Today daily open 1.1884
 
Trends
Daily SMA20 1.1584
Daily SMA50 1.137
Daily SMA100 1.1645
Daily SMA200 1.2224
 
Levels
Previous Daily High 1.1951
Previous Daily Low 1.1858
Previous Weekly High 1.2029
Previous Weekly Low 1.171
Previous Monthly High 1.1646
Previous Monthly Low 1.0924
Daily Fibonacci 38.2% 1.1915
Daily Fibonacci 61.8% 1.1893
Daily Pivot Point S1 1.1844
Daily Pivot Point S2 1.1805
Daily Pivot Point S3 1.1751
Daily Pivot Point R1 1.1937
Daily Pivot Point R2 1.199
Daily Pivot Point R3 1.203

 

 

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