GBP/USD Price Analysis: Gathers strength for a sustainable move above 1.2500
- GBP/USD is hovering near 1.2500, gathering strength for a decisive breakout.
- The USD Index has regained strength as investors are shifting their focus toward the Fed policy.
- GBP/USD is consolidating in a range of 1.2436-1.2500 amid the absence of a critical trigger.
The GBP/USD pair is consolidating near the psychological resistance of 1.2500 in the Asian session. The Cable is gathering strength for a sustained breakout above 1.2500 after a few failed attempts. Rising expectations of more interest rate hikes from the Bank of England (BoE) to arrest double-digit stubborn inflation are fueling fresh blood into the Pound Sterling.
The US Dollar Index (DXY) has regained strength and has jumped above 101.70 as investors are shifting their focus toward the monetary policy decision by the Federal Reserve (Fed), which will be announced next week.
GBP/USD is consolidating in a range of 1.2436-1.2500 on an hourly scale. The 20-period Exponential Moving Average (EMA) at 1.2483 is still providing support to Pound Sterling, indicating that the upside bias has not faded yet. A potential resistance is placed from April 14 high at 1.2545 while the downside is being cushioned near support plotted from April 10 low at 1.2344.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped back into the 40.00-60.00 range, signaling a lack of momentum.
A decisive move above April 13 high at 1.2537 will drive the asset towards to a fresh 10-month high at 1.2597, which is 08 June 2022 high. A breach of the latter will expose the asset to May 27 high at 1.2667.
On the flip side, a slippage below April 10 low at 1.2345 will expose the asset to March 30 low at 1.2294 followed by March 27 low at 1.2219.
GBP/USD hourly chart
