GBP/USD Price Analysis: Pulls back before resuming uptrend towards 100DMA at 1.1740
- GBP/USD pauses two-day bullish momentum, as the US dollar attempts a comeback.
- Markets turn cautious amid mixed headlines on the upcoming UK fiscal plan.
- Cable looks to recapture 100DMA amid a symmetrical triangle breakout.
GBP/USD is treading water above 1.1600, pausing a two-day uptrend amid a cautious market mood. The US dollar is finding its feet, as investors seek refuge in the safe haven ahead of the critical ECB rate hike decision and the US advance Q3 GDP release.
Meanwhile, GBP bulls take a breather amid mixed expectations from the upcoming UK medium-term fiscal plan, which Chancellor Jermey Hunt pushed back to November 17. The UK media outlets reported that the new Prime Minister Rishi Sunak is reconsidering tax rises and major public spending cuts after a dramatic improvement in the state of the nation’s finances.
Looking ahead, the dollar price action and risk trends will continue to influence the risk-sensitive British pound while the ECB decision could also have a EUR/GBP cross-driven rub-off effect on the major.
From a short-term technical perspective, GBP/USD is gathering strength to yield a sustained break above the bearish 100-Daily Moving Average (DMA) at 1.1740.
In doing so, the pair has pulled back slightly in recent trades but holds above the 1.1600 barrier. The extension of the upside remains on the cards, especially after the spot confirmed a symmetrical triangle breakout on the daily chart on Tuesday.
The 14-day Relative Strength Index (RSI) has turned lower but remains comfortably above the midline, favoring bullish traders.
Buyers need acceptance above the 1.1650 psychological level to resume the upbeat momentum.
GBP/USD: Daily chart
On the flip side, bears will face an uphill task so long as bulls defend the 50DMA, now at 1.1385. Ahead of that the 1.1500 support zone and the previous day’s low of 1.1430 will continue guarding the downside.
All in all, the upside appears more compelling amid a near-term bullish technical setup for the GBP/USD pair.
GBP/USD: Additional technical levels