GBP/USD Price Analysis: Returns below 1.2500 amid a delay in approval of higher US debt-ceiling limit

• GBP/USD has turned sideways after a sell-off move below 1.2500 as approval for raising the US debt-ceiling limit has been delayed.
• The Pound Sterling remained in action on Tuesday after the release of the downbeat UK Employment data.
• GBP/USD is at a make or a break level near the lower portion of the Rising Channel chart pattern plotted from 1.2276.

The GBP/USD pair is demonstrating a sideways auction above 1.2480 after a downside move below the psychological support of 1.2500 in the early Asian session. The Cable witnessed a steep fall after the White House reported that the decision for the approval of a higher US borrowing cap limit has been postponed till the end of the week.

Market mood is expected to remain cautious as each day spent without a concrete decision on the US debt-ceiling is pushing the United States economy into a position of default. The US Dollar Index (DXY) rebounded to near 102.60 as all parties familiar with US debt-ceiling negotiations have admitted disagreement for the approval of a higher US debt-ceiling limit without cutting the spending budget.

The Pound Sterling rebounded sharply on Tuesday after the release of the downbeat United Kingdom Employment data. However, those gains have faded now. Three-month Unemployment Rate jumped to 3.9% vs. the estimates and the former release of 3.8%. Claimant Count Change (April) soared to 46.7K while the street was anticipating a decline of 10.8K. Also, Average Earnings excluding bonuses landed at 6.7%, missing estimates of 6.8%.

GBP/USD is at a make or a break level near the lower portion of the Rising Channel chart pattern plotted from April 03 low at 1.2276. The 50-period Exponential Moving Average (EMA) has restricted the upside of the Pound Sterling.

A confident break of the Relative Strength Index (RSI) (14) below 40.00 will trigger the downside momentum.

A downside move below May 12 low at 1.2440 will trigger a breakdown of the Rising Channel pattern and will expose the Cable to April 21 low at 1.2367 followed by April 03 low at 1.2276.

On the flip side, a recovery move above May 09 high at 1.2640 will drive the major toward the round-level resistance at 1.2700 and 26 April 2022 high at 1.2772.

GBP/USD four-hour chart