GBP/USD Price Analysis: Eyes 1.2200 on upbeat market mood

• The risk profile seems positive led by the continuation of upside movement in the S&P500.
• A rangebound auction is expected from the USD Index ahead of the US inflation data.
• The Cable has picked strength after dropping to near the round-level support around 1.2100.

The GBP/USD pair has picked up demand after dropping to near 1.2140 in the Asian session. The Cable is attempting to come out of the woods but might first approach 1.2200 to regain sheer strength. The risk appetite of the market participants is improving further as S&P500 futures have carry-forwarded Tuesday’s gains in early Tokyo.

Meanwhile, the 10-year US Treasury yields are facing minor pressure and have eased to 3.61%, portraying a recovery in risk appetite theme. The US Dollar Index (DXY) is expected to continue its lackluster performance till the release of the United States Consumer Price Index (CPI) data.

On a four-hour scale, the Cable has picked strength after dropping to near the horizontal support plotted from December 27 high around 1.2100. Correction in cable seems healthy amid the absence of wider ticks, which resulted in a resumption of the upside journey going ahead.

A bull cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 1.2040, adds to the upside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is struggling to sustain in the bullish range of 60.00-80.00, which will trigger the bullish momentum.

Should the asset break above Thursday’s high at 1.2210, Pound Sterling bulls will drive Cable towards December 5 high at 1.2344 followed by December 14 high at 1.2446.

Alternatively, a slippage below Thursday's at 1.1873 will drag the major toward November 21 low around 1.1778. A breakdown of the latter will expose Cable for more downside towards the round-level support at 1.1700.

GBP/USD four-hour chart