GBP/USD Price Analysis: Consolidates below 1.1200 after breaching key daily support line

• GBP/USD is attempting a bounce but remains capped below 1.1200.
• Risk-off flows dominate amid mixed US data and ahead of US NFP.
• Cable closes Thursday below critical daily trendline support.

GBP/USD has paused its corrective decline from three-week highs of 1.1495, as investors remain in a wait-and-see mode heading into Friday’s US Nonfarm Payrolls release.

The Asian markets remain cautious, with most FX pairs in thin ranges, refraining from placing big bets. Therefore, the US dollar shows lackluster performance alongside the yields, consolidating the two-day rebound. The recent series of mixed US data and uncertainty over the Fed’s next rate hike move keep investors on the edge.

Meanwhile, the pound remains vulnerable against the dollar, as investors assess UK PM Liz Truss’ recent speech at the Conservative party conference on Wednesday. Truss urged the Conservative party to stick together and help transform the economy and the country. Her comments come after the government’s tax rate cut U-turn was announced on Monday.

From a short-term technical perspective, GBP/USD breached the rising trendline support, then at 1.1193 on a daily closing basis on Thursday.

This suggests cable bears are likely to extend the ongoing correction from near 1.1500 levels.

The 14-day Relative Strength Index (RSI) is lurking below the midline, backing the bearish prospects.

A fresh selling wave could revive bears, calling for a retest of the 1.1100 level on a break of the daily low at 1.1135.

The October low of 1.1085 will be next in sight for sellers.

GBP/USD: Daily chart

On the upside, strong resistance awaits at 1.1200, above which the horizontal 21-Daily Moving Average (DMA) at 1.1259 will be put to test.

The rising trendline support now resistance at 1.1302 will be a tough nut to crack for bulls on the road to recovery.

GBP/USD: Additional technical levels