GBP/USD Price Analysis: Breakdown of H&S looks likely

• A mild recovery in S&P500 futures is indicating that the risk-on mood is attempting to regain traction.
• A breakdown of an H&S chart pattern will result in the sheer downside ahead.
• The RSI (14) has slipped into the bearish range of 20.00-40.00, which indicates more weakness ahead.

The GBP/USD pair has sensed a temporary demand below the critical support of 1.1900 in the Asian session, however, the broader set of the risk profile is extremely negative. The Cable asset is likely to remain on the tenterhooks as stronger United States job market data has accelerated the odds of further policy tightening consideration by the Federal Reserve (Fed).

S&P500 futures have displayed a higher tick in early Asia after a massive sell-off on Thursday but still portraying caution before turning to risk-sensitive assets. The US Dollar Index (DXY) is expected to display a sideways action ahead of the release of the US Nonfarm Payrolls (NFP) data.

On a four-hour scale, the Cable is hovering near the neckline of the Head and Shoulder (H&S) chart pattern, which is plotted from December 29 low around 1.1900. The aforementioned chart pattern indicates a stretched inventory distribution, which results in volatility expansion after a breakdown.

Declining 20-and 50-period Exponential Moving Averages (EMAs) at 1.1990 and 1.2010 respectively add to the downside filters.

Also, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates more weakness ahead.

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

On the flip side, the Pound Sterling needs to push the Cable decisively above December 27 high around 1.2100 for an upside move, which will drive the major towards December 21 high at 1.2147 followed by December 21 high around 1.2200.

GBP/USD four-hour chart