GBP/USD Price Analysis: Trades above 23.6% Fibo at 1.2740, caution ahead of UK PMIs

• GBP/USD experiences strength due to the possibility of interest rate hikes by the BoE.
• 55-day EMA acts as the immediate support aligned to the weekly low at 1.2710.
• MACD suggests mixed sentiments of GBP/USD traders.

GBP/USD trades higher around 23.6% Fibonacci retracement at 1.2740 at the time of writing during the Asian session on Wednesday. The pair gets support from the possibility of interest rate hikes in the September meeting by the Bank of England (BoE). Market participants turn cautious ahead of United Kingdom (UK) preliminary S&P Global/CIPS Composite PMIs for August, scheduled to be released later in the day.

The 55-day Exponential Moving Average (EMA) at 1.2728 acts as the immediate support, followed by the weekly low at 1.2710. A firm below the latter could open the doors for the GBP/USD sellers to navigate the region toward a monthly low at 1.2616.

On the upside, the GBP/USD pair could face a challenge around the 21-day EMA at 1.2755 as it appears to be a key barrier. An upside breakout could lead the pair to explore the region around the 1.2800 psychological level aligned to 38.2% Fibo at 1.2817.

The Moving Average Convergence Divergence (MACD) line suggests mixed sentiment of GBP/USD traders as it stays below the centerline but also shows convergence below the signal line. The 14-day Relative Strength Index (RSI) remains below 50, which suggests a bearish bias in the pair.

GBP/USD: Daily Chart