GBP/USD Price Analysis: Cable buyers approach 1.2400 resistance confluence

• GBP/USD grinds near intraday high, extends previous day’s rebound from two-month low.
• Convergence of 50-EMA, 13-day-old descending trend line challenges Cable pair buyers.
• Downbeat RSI underpins corrective bounce off 100-EMA, ascending trend line from last November also checks Pound Sterling bears.

GBP/USD pares monthly losses, the first in three, around 1.2360 during early Monday as markets in the UK and the US are off for the Memorial Day holiday. In doing so, the Cable pair extends the previous day’s recovery from the last levels since early April as the US Dollar retreats from a multi-day high despite the Biden-McCarthy deal on debt ceiling extension.

Also read: GBP/USD recovers from 1.2350 as USD Index drops amid US debt-ceiling raise approval

That said, the below 50 levels of the RSI line, placed at 14, joins the 100-Exopnential Moving Average (EMA) to put a floor under the Pound Sterling pair around the 1.2300 round figure.

Even so, the bearish MACD signals and the 1.2400 resistance confluence, including the 50-EMA and a two-week-old descending trend line, restrict immediate upside moves of the GBP/USD pair.

Following that, the tops marked market during late 2022 and in the last month, around 1.2440 and 1.2585 in that order, could act as the final defense of the Cable bears.

On the contrary, a downside break of the 100-EMA level surrounding 1.2300 isn’t an open invitation to the Pound Sterling bears as an upward-sloping support line from November 2022, close to 1.2230 could restrict further downside of the pair.

Though, a clear downside break of the 1.2230 support won’t hesitate to challenge the 1.2000 round figure on its way to meet early 2023 low surrounding 1.1840.

GBP/USD: Daily chart

Trend: Limited recovery expected