• GBP/USD has come back inside the woods as investors have sidelined ahead of US borrowing cap issues.
• US Biden believes that a deep dive into tax loopholes is necessary to ensure that the wealthy class should pay a fair amount of tax.
• The Cable formed a Head and Shoulder pattern, which indicates a bearish reversal after a breakdown of the neckline placed from 1.2440.

The GBP/USD pair is displaying a sideways auction in a range of 1.2420-1.2470 from Monday. The Cable is inside the woods as the investors are awaiting more developments over US debt-ceiling issues as each day passing is pushing the United States economy to a default situation.

S&P500 remained directionless on Monday as investors are expected to take decisive action after the face-to-face meeting between US President Joe Biden and House of Representatives Kevin McCarthy.

The US Dollar Index (DXY) has defended its immediate support of 103.20. Meanwhile, US Biden has cited that he believes Democrats will make progress on the debt-ceiling but a reduction in spending initiatives is needed. Also, a deep dive into tax loopholes is necessary to ensure that the wealthy class should pay a fair amount of tax.

GBP/USD witnessed a steep fall after a breakdown of the upward-sloping trendline plotted from April 03 low at 1.2275 on a four-hour scale. The Cable formed a Head and Shoulder pattern, which indicates a bearish reversal after a downside break below the neckline placed from April 27 low at 1.2440.

The Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, indicating a lackluster performance ahead of the US borrowing cap issues.

Should the asset decline below May 19 low at 1.2390, US Dollar bulls will get strengthened further and will drag the Cable toward April 10 low at 1.2344 followed by April 03 low at 1.2275.

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