Title: GBP/USD Price Analysis: Breakdown of triangle warrants more weakness, 1.1400 eyed
September 01, 2022 12:36 AM ET
The GBP/USD pair posted a vulnerable performance after giving up critical support at 1.1600 during the Asian session. Cable is falling rapidly and hit an intraday low of 1.157 on rising long-term inflation expectations. According to Citi, 10-year inflation expectations rose to 4.8%, compared to the Bank of England's (BOE) desired rate of 2%.
The breakout of the hourly symmetrical triangle chart pattern has weakened the pound bulls. The upper part of the aforementioned chart pattern is placed from Tuesday's high at 1.1761, while the lower part is plotted from Monday's low at 1.1645. The break of the triangle has resulted in heavy volume and wider ticks.
The falling 20- and 50-period exponential moving averages (EMAs) at 1.1610 and 1.1645, respectively, indicate more weakness ahead.
Meanwhile, the Relative Strength Index (RSI) (14) has moved into the bearish 20.00–40.00 area, triggering a fresh selling move.
A less confident pullback move near Wednesday's low of 1.1600 will activate a breakout sale. If that happens, the asset will be dragged back to the March 19, 2020 low at 1.1472. A slip below 1.1472 will drag the cable to the round support level at 1.1400.
On the other hand, a break above Wednesday's average price at 1.1650 will send the asset toward the round resistance level at 1.1700, followed by Tuesday's high near 1.176.