GBP/USD Price Analysis: On track for strongest quarterly gain against USD since 2009

• GBP/USD is coming to a peak in a coil which puts to an imminent breakout.
• The emphasis is currently on a test of 1.2080 for the coming sessions.
• If the bears fail to break this level of support, then a meaningful correction to the upside will be on the cards.

GBP/USD remains on the backside of the late September rally's trendline where the pair gained some 20% in the quarter so far, albeit shedding gains to around 3% to the current spot price and consolidation lows of 1.20975. Still, the Pound Sterling is on track for its best quarter in more than 13 years. However, However, GBP/USD remains about 10% lower for the year and the following analysis is going to be through the eyes of the bears. 

GBP/USD was last -0.6% having fluctuated in and out of the positive territory on Tuesday, driven by volatility due to the Bank of Japan's (BoJ) surprise tweak to its bond yield control. The BoJ is now allowing long-term interest rates to rise more in a move aimed at easing some of the costs of prolonged monetary stimulus.

This means that the Japanese could be looking to bring assets home, sinking all ships vs. the yen on the forex board. However, the price is now settled back within the volatility between 1.2223 and 1.2084 but it is coiled into a potential breakout peak below 1.2150. 

GBP/USD Daily chart

As the images above show, the price is on the backside of the trend and us testing the 1.2100 support. An upside correction into the prior bearish impulse would be expected which eyes 1.2250 resistance that is marked by the volume profile and confluence with the 38.2% Fibonacci retracement as well as the prior structure. 

GBP/USD H4 charts

However, moving down to the lower time frames, the bears are flexing and we may have seen the last-ditch effort from the bulls already:

Meanwhile, the coil is coming to a peak and a break out is expected one way or the other. If the price imbalances above are not swept, then the outlook could play out as the above. 

Staying with the bearish bias, the bearish wicks are a compelling feature which puts the emphasis on a test of 1.2080 for the coming sessions. If the bears fail to break this level of support, then a meaningful correction to the upside, as oper the daily chart, has a higher probability of playing out.