GBP/USD Price Analysis: Double tops, rising wedge tease bears as BOE looms
- GBP/USD bulls take a breather at six-month high, print mild losses of late.
- Double tops, bearish wedge formation joins RSI retreat to tease sellers.
- Key Exponential Moving Averages (EMAs) challenge further downside.
GBP/USD retreats from a six-month high but the bears appear cautious ahead of the key Bank of England (BOE) monetary policy meeting early Thursday. That said, the Cable pair prints the first daily loss in seven days near 1.2420, despite posting meager losses as of late.
Also read: GBP/USD: Cable seesaws at six-month high ahead of Bank of England-inspired ‘Super Thursday’
It’s worth noting that the double tops around 1.2450 and the pullback in the RSI (14) signals that the GBP/USD bulls are running out of steam.
The same could direct the Cable pair toward the 1.2400 round figure before highlighting the 50-EMA level surrounding 1.2360.
However, a convergence of the 100-EMA and support line of a two-week-old rising wedge bearish chart pattern, near 1.2315, appears a tough nut to crack for the GBP/USD bears.
In a case where the Cable pair breaks the 1.2315 support, the 200-EMA level near 1.2255 could act as the last defense of the GBP/USD buyers before giving control to the bears.
On the contrary, a successful break of the double tops surrounding 1.2450 will need validation from the clear run-up past the aforementioned wedge’s upper line, close to 1.2470, to convince GBP/USD bulls.
Following that, the theoretical target for the double tops, near 1.2560, could lure the pair buyers before directing them to the May month’s peak near 1.2665.
GBP/USD: Hourly chart
Trend: Further downside expected