GBP/USD Price Analysis: Inverted Flag confirms more downside, 1.2400 eyed

• The greenback bulls challenge the demand zone, which is placed in a 1.2548-1.2570.
• An Inverted Flag formation advocates a follow-up sell-off after a topsy-turvy move.
• A death cross, represented by the 50- and 200-period EMAs add to the downside filters.

The pound bulls have displayed a subdued performance in the entire Asian session amid the unavailability of any potential trigger. A phase of topsy-turvy moves in the cable is witnessed after a sheer downside move from a high of 1.2600. The asset experienced intense selling pressure after slipping below the critical support of 1.2558.

On an hourly scale, the GBP/USD pair has formed an Inverted Flag chart pattern that indicates further downside after a rangebound move. Usually, an Inverted Flag dictates the initiation of fresh shorts by those investors, which prefer to execute positions after the establishment of a downside bias. The cable is hovering near the demand zone placed in a 1.2548-1.2570.

A death cross has been displayed by the 50- and 200-period Exponential Moving Averages (EMAs) at 1.2555, which signals more pain ahead.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bearish range of 20.00-40.00, which adds to the downside filters.

Should the asset drops below Wednesday’s low at 1.2459, the greenback bulls will get strengthened and will drag the asset towards May 20 low at 1.2438. A breach of the latter will open room for more downside to near the round-level support at 1.2400.

On the contrary, an upside move above Tuesday’s high at 1.2630 will trigger an initiative buying action, which will drive cable towards May’s high at 1.2667, followed by the round-level resistance at 1.2700.

GBP/USD hourly chart