- A breakout of a symmetrical triangle states an expansion in volatility that results in wider ticks and heavy volume.
- Advancing 20-and 50-EMAs indicate more upside ahead.
- The RSI (14) has shifted into the bullish range of 60.00-80.00, which adds to the upside filters.
The GBP/USD pair has refreshed its three-day high at 1.1903 in the early Asian session as investors’ risk appetite is improving dramatically. The Cable is expected to display more gains as the US dollar index (DXY) is facing sheer pressure due to a significant recovery in the risk-on profile.
The DXY witnessed a steep fall after failing to recapture the round-level resistance of 108.00. Volatility in the DXY counter is expected to remain at the rooftop as investors eye the release of Federal Open Market Committee (FOMC) minutes and the US Durable Goods Orders.
On an hourly scale, the Cable has delivered a breakout of the Symmetrical Triangle chart pattern, which will result in wider ticks and heavy volume. The asset is surpassed 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 asset is auctioning above the 20-and 50-period Exponential Moving Averages (EMAs) at 1.1876 and 1.1863 respectively, which adds to the upside filters.
Also, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which favors a bullish momentum.
For a decisive upside, the Cable needs to break Friday’s high at 1.1950, which will drive the asset 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