- The GBP/USD pair maintains a bearish bias as long as it stays under the channel’s downside line.
- A valid breakdown below the 61.8% retracement level could signal potential drop towards the lower median line (LML).
- The US economic data could be decisive in the short term.
Our GBP/USD forecast sees the pair accelerate its sell-off as the Dollar Index rally boosted the greenback. In the short term, the currency pair registered a temporary rebound which represents a downside continuation pattern.
It’s traded at 1.3384 level right above 1.3374 today’s low. The bias is berish, so more declines are favored. The rate ignored strong downside obstacles signaling a potential drop towards new lows.
As you already know, the USD rallied after the FOMC. It seems that the Federal Reserve could start hiking rates in March when they will end the pandemic QE. Today, the United Kingdom CBI Realized Sales came in better than expected at 28 points versus 11 points expected. Despite positive data, the British Pound remains bearish.
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Later today, the US economic data could move the pair. In line with expectations data or better could keep the USD higher, while bad figures could force the greenback to depreciate a little.
The Advance GDP is expected to register a 5.3% growth, the Advance GDP Price Index could report a 6.0% growth, while the Unemployment Claims may drop from 286K to 260K in the last week. In addition, the Pending Home Sales, Durable Goods Orders, and the Core Durable Goods Orders will be released as well.
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GBP/USD Forecast: Price Technical Analysis – Correction
The currency pair failed to stay above the channel’s downside line and above the 50% (1.3454) retracement level confirming further drop. It has retested the 38.2% retracement level before resuming its corrective phase.
Now, it challenges the 61.8% (1.3385) retracement level which represents a static support. Making a valid breakdown below this downside obstacle may open the door for a deeper drop. You already know from my analyses that the GBP/USD pair could be attracted by the median line (LML) after stabilizing below the median line (ML) of the ascending pitchfork.
In the short term, it remains to see how it will react around the 61.8% level. We cannot exclude a minor rebound after its amazing sell-off.
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