GBP/USD Price Analysis: Momentum divergence supports pound bulls, 1.1900 eyed

• Pound bulls have rebounded after hitting the lower portion of the Falling Channel.
• The cable is expecting a pullback as the RSI (14) has displayed momentum loss.
• Declining 50-EMA is still favoring the greenback bulls.

The GBP/USD pair is oscillating in a narrow range of 1.1817-1.1828 in early Asia after a firmer rebound from Thursday’s low at 1.1760. On a broader note, the cable has remained in the grip of bears after failing to sustain above the critical resistance of 1.1900.

The cable has rebounded after sensing a cushion from the lower portion of the falling channel formed on an hourly scale. The upper portion of the above-mentioned hart pattern is placed from July 4 high at 1.2165 while the lower portion is plotted from July 5 low at 1.1900. A rebound from the lower portion of the above-mentioned chart pattern doesn't resemble a bullish reversal but a pullback move, which may meet offers soon.

The greenback bulls are defending the 20-period Exponential Moving Average (EMA) at 1.1831. While the 50-EMA is still higher than the cable prices and indicates the short-term trend is still down.

Meanwhile, the Relative Strength Index (RSI) (14) has displayed signs of momentum loss as the asset is continuously forming lower highs while the momentum oscillator is forming higher lows. The formation of a bullish negative divergence dictates a bullish reversal but needs more filters for validation.

The cable is expected to display more losses if the asset drops below the round-level support of 1.1800. An occurrence of the same will drag the asset towards the 26 March 2020 low at 1.1777, followed by a 25 March 2020 low at 1.1638.

Alternatively, a decisive move above the July 8 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 hourly chart