GBP/USD Price Analysis: Downside halts for a while but remains favored, 1.1350 a key support

• A double bottom formation has resulted in a firmer rebound in the asset.
• The RSI (14) is on the verge of shifting into the bullish range of 60.00-80.00.
• A slippage below the two-year low at 1.1350 will drag the cable into unchartered territory.

The GBP/USD pair has witnessed a firmer rebound after defending its two-year low at 1.1350, recorded last week. The cable has extended its gains after overstepping the round-level resistance of 1.1400 and has reached its critical hurdle of 1.1440. The rebound move seems full of confidence and is expected to stay in bullish territory for a while, however, the broader picture is extremely brutal.

On an hourly scale, the asset has rebounded after forming a Double Bottom around a two-year low at 1.1350. A re-test of potential lows with lower selling pressure and absorption of the same with higher buying interest pushed the asset higher.

It is worth noting that the cable has crossed the 20-and 50-period Exponential Moving Averages (EMAs) at 1.1413 and 1.1426 respectively while the 50-EMA is still above the shorter one. This signals the strength of the pound bulls.

Also, the Relative Strength Index (RSI) (14) is on the verge of shifting into the bullish range of 60.00-80.00, which will trigger pound bulls for sheer upside momentum.

Should the asset drop below the fresh two-year low at 1.1350, greenback bulls will drag the cable towards the round-levels support of 1.1300. A slippage below the latter will drag the asset towards the 7 January 1985 low at 1.1245.

On the flip side, a break above Friday’s high at 1.1480 will send the asset towards Thursday’s high at 1.1542, followed by the round-level resistance at 1.1600.

GBP/USD hourly chart