GBP/USD Price Analysis: Rebound above 1.2400, remains vulnerable ahead of Fed Powell’s speech

• GBP/USD looks vulnerable above the immediate support of 1.2390 as the USD index is eyeing more upside.
• Fed’s Powell is expected to deliver interest rate guidance for June’s monetary policy meeting.
• GBP/USD has delivered a breakdown of the Head and Shoulder chart pattern.

The GBP/USD pair has displayed exhaustion in the downside momentum after slipping below the round-level support of 1.2400. The Cable is making efforts for a recovery, however, the solid US Dollar’s appeal is in traction.

S&P500 futures are holding significant gains in Asia, portraying an upbeat market mood.  The US Dollar Index (DXY) is gathering strength for shifting its auction above 103.60 ahead of the speech from Federal Reserve (Fed) chair Jerome Powell speech. Fed’s Powell is expected to deliver interest rate guidance for June’s monetary policy meeting.

GBP/USD has delivered a breakdown of the Head and Shoulder chart pattern formed on a four-hour scale. The breakdown of the H&S chart pattern indicates a bearish reversal. The neckline of the H&S pattern was plotted from April 27 low at 1.2436. Earlier, the Pound Sterling lost its charm after dropping below the upward-sloping trendline plotted from April 03 low at 1.2275.

The 20-period Exponential Moving Average (EMA) at 1.2462 is acting as a barricade for the Pound Sterling bulls.

Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, signaling sheer weakness ahead.

Should the asset decline below the immediate support of 1.2390, US Dollar bulls will get strengthened further and will drag the Cable toward April 10 low at 1.2344 followed by April 03 low at 1.2275.

On the flip side, a recovery move above May 09 high at 1.2640 will drive the major toward the round-level resistance at 1.2700 and 26 April 2022 high at 1.2772.

GBP/USD four-hour chart