GBP/USD Price Analysis: Bulls gather strength to take out the key 1.2200 resistance

• GBP/USD kicks off the week on the wrong footing amid resurgent US Dollar demand.
• Risk aversion weighs negatively on the Pound Sterling ahead of BoE-speak.
• GBP/USD buyers stay hopeful amid bullish RSI, eyes on 1.2128 rising wedge hurdle.

GBP/USD is consolidating the upside below 1.2100, having failed to sustain above the latter earlier in the Asian session this Thursday. The strength in the major can be mainly attributed to the broad-based weakness in the US Dollar following the dovish FOMC minutes and downbeat US S&P Global PMIs.

The greenback has failed to capitalize on a cautious market mood, courtesy of the record high covid cases in China and the resultant restrictions. The subdued trading on Thanksgiving Day is also adding to the weight on the US Dollar while keeping GBP/USD afloat.  

The upside in the pair, however, appears capped on account of looming Brexit concerns. UK Prime Minister Rishi Sunak said that Britain will not pursue any post-Brexit relationship with the EU "that relies on alignment with EU laws”.

Looking forward, thin market conditions could exaggerate the moves in GBP/USD pair while traders will also closely follow the speeches from the Bank of England (BoE) policymakers in the day ahead.

From a short-term technical perspective, GBP/USD is gathering strength to clear out the critical resistance near 1.2200, which is the convergence of the rising wedge upper boundary and the bearish 21-Daily Moving Average (DMA).

The 14-day Relative Strength Index (RSI) has turned flat while above the midline, justifying the listless action in the pair, at the moment. Although bulls stay hopeful so long as the RSI holds above the 50.00 level.

Acceptance above the aforesaid key resistance will initiate a solid uptrend towards the 1.2250 psychological level.

GBP/USD: Daily chart

On the flip side, bears need a sustained move below the 1.2050 support area to negate the upbeat momentum. The downside will then open up toward the lower boundary of the rising wedge at 1.1784.

The next relevant cushion is seen at the confluence of the 21 and 100-Daily Moving Averages (DMA) at around 1.1660.

GBP/USD: Additional technical levels