Home GBP/USD Price Lacking Follow-through, Eyes on US GDP

GBP/USD Price Lacking Follow-through, Eyes on US GDP

  • The GBP/USD pair stands right below critical resistance.
  • After its last drop, a rebound was natural.
  • The US data should be decisive tomorrow.

The GBP/USD price dropped in the short term, trading at 1.2308 at the time of writing. After its strong growth, a corrective downside seems likely.

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Fundamentally, the USD received a helping hand from the US CB Consumer Confidence in yesterday’s trading session. The economic indicator came in at 104.2 points versus the 101.0 points estimated and above 103.4 points in the previous reporting period.

Today, the UK reported mixed data. The Net Lending to Individuals and M4 Money Supply came in worse than expected, while Mortgage Approvals came in worse than expected. Later, the FPC Meeting Minutes and FPC Statement could shake the price.

On the other hand, the US Pending Home Sales could report a 2.9% drop versus the 8.1% growth in the previous reporting period.

The US will release high-impact data tomorrow, so the fundamentals should take the lead and move the rate. Final GDP may report a 2.7% growth, while Unemployment Claims are expected at 196K in the last week. Positive US data should lift the greenback.

GBP/USD Price Technical Analysis: Rising Wedge

GBP/USD price

From the technical point of view, the GBP/USD pair developed a potential Rising Wedge pattern. This is seen as a reversal formation. Still, the price failed to stabilize below the 1.2200 psychological level, signaling exhausted sellers.

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After the previous sell-off, the GBP/USD pair was somehow expected to return to test the broken uptrend line. As you can see on the hourly chart, the price failed to test the broken dynamic support, and now it has reached 1.2343 former high, which stands as a static resistance.

Failing to stay above the weekly R1 (1.2330) may announce that the leg higher ended, and the sellers could take full control. The last bullish momentum could represent a flag pattern. Still, a valid breakout through the 1.2343 activates further growth and invalidates the bearish scenario.

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Olimpiu Tuns

Olimpiu Tuns

Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.