Forex News

• A responsive buying action near the rising channel lower portion indicates the strength of an asset.
• Pound bulls have successfully defended the 200-EMA near 1.2125.
• A golden cross formation by the 50-and 200-EMAs adds to the upside filters.

The GBP/USD pair has turned sideways around 1.2160 in the early Tokyo session after extending recovery above 1.2120 on Thursday. Earlier, the cable displayed a responsive buying action after plummeting below 1.2080 as the Bank of England (BOE) announced an interest rate decision. The BOE elevated the interest rates by 50 basis points (bps) to 1.75%.

On a four-hour scale, the cable found a cushion from the lower portion of the Rising Channel, which is placed from July 14 low at 1.1760. While the upper portion is placed from July 13 high at 1.1968. The availability of decent buying interest around the lower portion of the Rising Channel indicates a fresh bullish impulsive wave ahead.

The pound bulls have confidently defended the 200-period Exponential Moving Average (EMA) at 1.2125, which signals the strength of the asset. Also, a golden cross formation by the 50-and 200-EMAs has infused fresh blood in the cable.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range but is likely to fetch momentum if the asset oversteps 60.00 swiftly.

The cable may initiate a fresh bullish impulsive wave if the asset oversteps Thursday at 1.2212. This will drive the asset towards the round-level resistance of 1.2300, followed by a June 27 high at 1.2332.

On the flip side, a decisive slippage below Thursday's low at 1.2065 will drag the asset towards the psychological support at 1.2000.  A downside move from 1.2000 will unleash the greenback bulls and will drag the asset towards July 12 high at 1.1967.

GBP/USD four-hour chart