GBP/USD Price Analysis: Test of a 20-EMA on gradual correction narrates a fresh buying opportunity

• The Cable has turned sideways ahead of the interest rate decision by the Fed.
• A gradual corrective move after a symmetrical triangle breakout offers a fresh buying opportunity.
• The RSI (14) needs to climb in the bullish range for a fresh rally.

The GBP/USD pair is displaying a lackluster performance in the Asian session as investors are awaiting the interest rate decision by the Federal Reserve (Fed) for fresh cues. The Cable is hovering around 1.2350 after correcting from a fresh six-month high at 1.2444.

Meanwhile, the US Dollar Index (DXY) is auctioning in a balanced profile as the market mood has turned quiet ahead of Fed’s policy. A slowdown in inflation consecutively for two months has cemented the odds of a lower rate hike by Fed chair Jerome Powell.

The GBP/USD pair has corrected gradually to near the 20-period Exponential Moving Average (EMA) at around 1.2340. Earlier, the Cable displayed a breakout of the Symmetrical Triangle chart pattern, which indicates volatility expansion. Therefore, a gradual correction in an upside trend presents a fresh buying opportunity to the market participants.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range, which indicates that bullish momentum is inactive.

For a confident rebound, the Cable needs to surpass Wednesday’s high of around 1.2379, which will drive the asset toward Tuesday’s high at 1.2444, followed by the psychological resistance at 1.2500.

On the flip side, a drop below Friday’s low of around 1.2200 will drag the asset toward December 7 low at 1.2107. A breakdown of the latter will expose the major for more downside toward November 15 high at 1.2029.

GBP/USD hourly chart