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GBP/USD Price Analysis: Aims for a Breakout of the Descending Triangle above 1.2100
The British pound has been supported by an improvement in the risk-taking attitude. The Cable is lingering near the Descending Triangle pattern's downward-sloping trendline. The positive momentum will be triggered when the RSI (14) breaches the bullish zone of 60.00-80.00.
In the Asian session, the GBP/USD pair is demonstrating a disappointing performance as investors refrain from taking significant holdings due to the festive market sentiment. The Cable is swinging within a 10-pip range below 1.2060 and is likely to remain rangebound in the near future.
After falling to around 103.50, the US Dollar Index (DXY) has tried a recovery. The USD Index experienced a significant decline on Thursday as risk appetite recovered. In early trading, the yield on 10-year US Treasury bonds fell below 3.83 percent.
The Cable is gaining momentum in preparation for an hourly breakthrough of the Descending Triangle chart pattern. The major currency is hovering near the downward-sloping trendline drawn from the high of December 19 at 1.2242, while the horizontal support of the aforementioned chart pattern is located at the low of December 22 at 1.1992.
The pair is currently trading above the 20-period Exponential Moving Average (EMA) above 1.2050, indicating that the near-term uptrend is strong.
As the Relative Strength Index (RSI) (14) oscillates between 40.00 and 60.00, a consolidation is imminent. A breach within the bullish area of 60.00-80.00 will activate bullish momentum.
Should the Cable decisively surpass the December 27 high of 1.2112, Pound Sterling bulls would drive the asset to the December 21 high of 1.2189, followed by the December 19 high of 1.2242.
In contrast, a decisive decline below the low of December 22 at 1.1992 will result in a collapse of the Descending Triangle and drag the Cable toward the low of November 29 at 1.1940. A breach below this level would expose the pound to more weakness toward the 30 November low around 1.1900.
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