GBP/USD Price Analysis: Triangle explosion warrants more downside, 1.1800 eyed

• The cable has given a downside break of the symmetrical triangle that signals more downside.
• Declining 20- and 50-period EMAs add to the downside filters.
• The RSI (14) has shifted into the bearish range of 20.00-40.00, which signals more pain ahead.

The GBP/USD pair is displaying topsy-turvy moves in a narrow range of 1.1882-1.1897 in the Asian session. The cable has shown a mild consolidation after a vertical downside move. The asset tumbled significantly on Monday after surrendering the psychological support of 1.2000. The asset is hovering around the fresh two-year low at 1.1866.

On the four-hour scale, the cable has given a downside break of the symmetrical triangle. The downward-sloping trendline of the above-mentioned pattern is plotted from July 4 high at 1.2161 while the upward-sloping trendline is placed from Wednesday’s low at 1.1876. Also, the horizontal resistance placed from June 14 at 1.1934 will remain a critical resistance for the cable.

Declining 20- and 50-period Exponential Moving Averages (EMAs) at 1.1970 and 1.2027 respectively signal that the downside is still far from over.

Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which adds to the downside filters.

The cable is expected to display more losses if the asset drops below Monday’s low at 1.1866. An occurrence of the same will drag the asset to the round-level support of 1.1800, followed by a 26 March 2020 low at 1.1777.

Alternatively, a decisive move above Friday’s high of 1.2056 will send the asset towards July 4 high at 1.2161.  A breach of the latter will drive the cable towards June 28 high at 1.2292.

GBP/USD four-hour chart