GBP/USD Price Analysis: Bulls stepped in as 'morning star' chart pattern looms

• GBP/USD surges over 0.65% following disappointing US economic figures.
• Technical analysis indicates a potential upward movement if GBP/USD sustains a close near 1.2440, completing a 'morning star' pattern.
• Key resistances are ahead at 1.2500 and the 200-day moving average at 1.2565; downside risks persist below 1.2400.

The Pound Sterling rallied early in the North American session, gaining more than 0.65% against the US Dollar after softer-than-expected data from the United States (US), which could spur the Federal Reserve to begin to ease policy faster than expected. The GBP/USD trades at 1.2434, after bouncing off lows hit at 1.2331.

GBP/USD Price Analysis: Technical outlook

From a technical perspective, the GBP/USD is still downward biased, as key resistance levels remain respected by price action. However, if the major achieves a daily close around the 1.2440 area, that will complete a 'morning star' candlestick chart pattern, suggesting the pair could aim higher.

In that event, the GBP/USD first resistance would be the 1.2500 psychological level. Once broken, further gains are seen, with the 200-day moving average (DMA) up next at 1.2565, ahead of 1.2600. Key resistance levels emerge at the 50-DMA at 1.2628 and the 100-DMA at 1.2649.

On the flip side, further losses are seen if the pair drops below 1.2400. A breach of the latter would pave the way to challenge the year-to-date (YTD) low of 1.2299.

GBP/USD Price Action - Daily Chart