GBP/USD Price Analysis: Ascending Triangle indicates consolidation ahead

• No revival in S&P500 futures is portraying a broader risk-off mood.
• Auctioning in a Descending Triangle chart pattern indicates volatility contraction.
• Cable is struggling to shift its auction profile above the 20-period EMA at around 1.2038.

The GBP/USD pair is struggling to extend its recovery above the immediate resistance of 1.2050 in the Tokyo session. The Cable attempted a rebound in Tokyo as the risk-off mood eased after investors started shrugging off uncertainty about a spike in Covid-19 cases in China.

Meanwhile, the US Dollar Index (DXY) is gauging a cushion after a correction from the four-day high at 104.56. S&P500 futures have failed to find a recovery, portraying a risk-aversion theme in the broader market. While the 10-year US Treasury yields have extended their losses below 3.86%.

Broadly, the Cable is trading in a Descending Triangle chart pattern, which indicates a volatility contraction on an hourly scale. The Pound Sterling witnessed demand after dropping to near the horizontal support of the aforementioned chart pattern placed from December 22 low at 1.1992. And, the downward-sloping trendline is plotted from December 19 high at 1.2242.

The Cable is struggling to shift its auction profile above the 20-period Exponential Moving Average (EMA) at around 1.2038.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates that the Cable is awaiting a fresh trigger.

Should the Cable surpasses December 27 high at 1.2112 decisively, Pound Sterling bulls will drive the asset toward December 21 high at 1.2189 followed by December 19 high at 1.2242.

On the flip side, a decisive downside below December 22 low at 1.1992 will trigger a breakdown of the Descending Triangle and will drag the Cable toward November 29 low at 1.1940. A slippage below the latter will expose the Cable for more weakness toward November 30 low around 1.1900.

GBP/USD hourly chart