GBP/USD Price Analysis: Sets for a downfall below 1.2360 amid sheer strength in the USD Index

• GBP/USD is struggling in defending its downside amid sheer strength in the US Dollar Index.
• Republicans are not agreeing to the tax increase and higher spending proposed for the budget by congressional Democrats.
• GBP/USD is challenging the demand zone placed in a narrow range of 1.2344-1.2356.

The GBP/USD pair looks vulnerable above the immediate support of 1.2360 in the early Asian session. The Cable is struggling in defending its downside amid sheer strength in the US Dollar Index due to the long-awaited US debt-ceiling raise by the White House.

Wednesday’s negotiations on US borrowing cap issues remained positive among the White House and Republicans, however, the latter are not agreeing to tax increases and higher spending proposed for the budget by congressional Democrats.

S&P500 futures have added stellar gains in early Asia after a sell-off on Wednesday, portraying a recovery in the overall risk-off market mood.

The Pound Sterling remained in the spotlight after the release of the United Kingdom’s inflation data on Wednesday.

GBP/USD is challenging the demand zone placed in a narrow range of 1.2344-1.2356 on a four-hour scale. The Cable is auctioning in a Falling Channel chart pattern in which each pullback is considered a selling opportunity by the market participants.

The Pound Sterling bulls are consistently facing barricades from the 20-period Exponential Moving Average (EMA) around 1.2412.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates that the downside momentum has been triggered.

Should the asset decline below April 10 low at 1.2344, US Dollar bulls will get strengthened further and will drag the Cable toward April 03 low at 1.2275, followed by March 14 high at 1.2204.

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