Upside seems favored on rising channel breakout
The GBPUSD pair has witnessed a decline below the critical support of 1.1800 in the Tokyo session. The asset has turned sideways amid the unavailability of any potential trigger. However, the risk profile is continuously solid post the release of the US inflation report.
(DXY) has witnessed intermediate support around 106.30 after a perpendicular decline move. S&P500 futures have sensed pressure after a significant jump on Thursday. While the 10-year US Treasury yields have rebounded to near 3.9%.
On a four-hour scale, the Cable has delivered a breakout of the Rising Channel chart pattern. The upper portion of the chart pattern is placed from October 5 high at 1.1496 while the lower portion is plotted from September 26 low at 1.0339. The asset has surpassed the horizontal resistance placed from September 13 high at 1.1738, which adds to the upside filters.
Advancing 20-and 50-period Exponential Moving Averages (EMAs) at 1.1658 and 1.1546, indicate more upside ahead.
Also, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which signals that the bullish momentum is active.
Going forward, a decisive break above Friday’s high at 1.1855 will drive the asset toward the psychological resistance of 1.2000. A break above 1.2000 will unleash cable bulls for more upside towards 1.2144.
Alternatively, a downside moves below Friday’s low at 1.1648 will push the asset back into the above-mentioned chart pattern, which will drag it towards Tuesday’s high at 1.1600, followed by October 25 high at 1.1500.