- An improvement in risk appetite is shifting momentum towards risk-sensitive currencies.
- The Cable is heading towards the downward-sloping trendline of the symmetrical triangle.
- Overlapping 20-EMA with asset indicates a consolidation head.
The GBP/USD pair has witnessed a steep rise to near 1.1856 in the Tokyo session after sensing buying interest below 1.1800. The Cable is marching towards the round-level resistance of 1.1900 as the risk appetite of the market participants has improved.
Meanwhile, the mighty US dollar index (DXY) has dropped below 107.58 amid a decline in safe-haven’s appeal. The US Treasury yields are facing immense pressure led by vanishing confidence for the continuation of bigger rate hike announcements by the Federal Reserve (Fed).
On an hourly scale, the asset is forming a symmetrical triangle chart pattern, which indicates a sheer slippage in volatility. The asset is advancing towards the downward-sloping trendline, plotted from November 15 high at 1.2029 while the upward-sloping trendline of the chart pattern is placed from November 14 low at 1.1710.
The 20-period Exponential Moving Average (EMA) at 1.1844 is overlapping with Cable prices, which indicates a consolidation ahead.
On the contrary, the Relative Strength Index (RSI) (14) is attempting to shift into the bullish range of 60.00-80.00, for upside momentum.
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