- The formation of a Rising Channel is advocating pound bulls.
- A break above the 200-EMA for the first time in the past three months adds to the upside filters.
- The RSI (14) is established in a 60.00-80.00 range, which signals more gains ahead.
The GBP/USD pair is witnessing topsy-turvy moves in a narrow range of 1.2649-1.2655 in the early Tokyo session. A four-day winning streak has been displayed by cable and its continuation is expected once it will overstep Monday’s high at 1.2660.
The formation of a Rising Channel on a four-hour scale has underpinned the pound bulls against the greenback. The lower boundary of the above-mentioned chart pattern is placed from May 13 low at 1.2155 while the upper boundary is plotted from May 11 high at 1.2400.
The asset has climbed above the 200-period Exponential Moving Average (EMA) for the first time in the past three months. The 200-EMA is hovering a little above 1.2600. Also, the 50-EMA at 1.2552 is advancing sharply higher, which adds to the upside filters.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which signals a continuation of bullish momentum, however, a slight pullback cannot be ruled out.
A minor pullback move towards the round-level support of 1.2600 will call for a responsive buying action by the market participants, which will send the asset towards Monday’s high at 1.2659. A breach of the latter will drive the asset towards the round-level resistance at 1.2700.
On the flip side, the pound bulls could lose their grip if the asset drops below the psychological support of 1.2500. This will drag the asset towards May 24 low at 1.2471, followed by May 11 high at 1.2400.
GBP/USD four-hour chart