- The GBP/USD pair maintains a bearish bias as long as it stays under the downtrend line.
- The US data could bring life to this market later today.
- The USD rallied as the DXY rebounded.
The GBP/USD price drops like a rock as the US dollar has managed to rebound. Even though the currency pair temporarily went up, it could go down again because the bias is still down.
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The USD took the lead even though the US economic data mixed yesterday. The greenback received a helping hand from the Advance GDP rose by 2.6% compared to the 2.3% expected and after the 0.6% drop registered in the previous reporting period.
The USD rallies after the ECB. The European Central Bank increased the Main Refinancing Rate by 75bps, matching expectations. Further rate hikes are expected in the next monetary policy meetings.
The USD would dominate the currency market even if the Advance GDP Price Index, Core Durable Goods Orders, Durable Goods Orders, and Unemployment Claims came in worse than expected.
Today, the US data could move the price. The Core PCE Price Index is expected to report a 0.5% growth versus 0.6% growth in the previous reporting period. This is seen as a high-impact event and could bring strong movements.
The Revised UoM Consumer Sentiment is expected at 59.7, below 59.8 in the previous reporting period, while Pending Home Sales may report a 4.4% drop. In addition, Personal Spending, Personal Income, and Employment Cost Index indicators will also be released.
GBP/USD price technical analysis: Sell-off
Technically, the pair found resistance at the R2 (1.1640). Now it has turned to the downside. Its failure to reach the down trendline or to stay above the median line (ML) signaled that the leg higher ended and that sellers could take full control. The next downside target is represented by 1.1490. The weekly R1 (1.1470) also represents a downside target and obstacle.
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The bias is bearish as long as it stays below the downtrend line. Temporary rebounds could bring new short opportunities. Breaking below 1.1547 downside obstacle signaled more declines. The ascending pitchfork’s lower median line (LML) stands as a strong major downside target if the rate continues to drop.
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