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GBP/USD Price analysis: There will likely be a decline toward 1.2100
A typical remedial action might push the wire in the direction of 1.2100. The 50-EMA at 1.2129 hasn't been challenged yet, but that's likely to change shortly. The RSI (14) range move from 40.00 to 60.00 shows that the cable has given up the upward momentum.
After giving up the crucial support of 1.2180 on Tuesday, the GBP/USD pair has corrected to be close to 1.2140. On Tuesday, the cable saw a severe sell-off after failing to retake monthly highs at 1.2293. Given that investors have supported the risk-off impulse as a result of rising US-China tensions over Taiwan, a corrective move is expected to intensify.
On a four-hour time frame, the cable is bidding in a Rising Channel configuration that, overall, favors the north side but experiences a number of good corrections along the way up. The upper part of the aforementioned chart pattern is drawn from the high of July 13 at 1.1968, while the bottom part is drawn from the low of July 14 at 1.1760.
The 20-period Exponential Moving Average (EMA) at 1.2190 has been given up by the asset, while the 50-EMA at 1.2129 is still intact but is likely to be tested sooner.
The Relative Strength Index (RSI) (14) has dipped into the 40.00–60.00 region, indicating that the bullish momentum for gold prices has slowed down.
The market players will be able to sell for a discount if there is a slight decline toward 1.2150. The wire will be dragged in that direction, approaching the 1.2100 round-level support. The greenback bulls will be released by a clear break below 1.2100, and the cable will continue to decline until it reaches a low of 1.2063 on July 29.
On the other hand, if the asset crosses above the 20-EMA at 1.2190, the cable could begin a new bullish impulsive wave. If this happens, the asset will rise to its high from July 29 at 1.2246, then reach its monthly high at 1.2294.
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