- The GBP/USD pair could extend its sell-off after making a new lower low.
- The median line (ML) acts as a magnet and it could attract the price.
- After escaping from the up channel’s body, the GBP/USD pair was expected to drop deeper.
Our GBP/USD forecast sees the pair trading in the red at 1.3314 level at the time of writing and it’s almost to register a fresh new low.
The price resumed its drop even if the Dollar Index slipped lower after its last rally. Fundamentally, the British Pound ignored the CBI Realized Sales today. The economic indicator was reported at 39 points above 32 expected and compared to 30 in the previous reporting period.
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Later today, the BOE Gov Bailey Speech at a moderated discussion with Mohamed El-Erian at the Cambridge Union is seen as a high-impact event.
On the other hand, the USD remains strong after the Unemployment Claims, Goods Trade Balance, Prelim GDP Price Index, Revised UoM Consumer Sentiment, Personal Income, and the Personal Spending reported better than expected data.
Dollar Index Price Technical Analysis: Up Channel
The Dollar Index retested the outside sliding line (sl1) and now it tries to resume its growth. As long as it stays above the uptrend line, within the up channel’s body, the index could approach and reach new highs. In the short term, a minor decline was somehow expected after yesterday’s rally. The upside scenario remains intact, so the next upside targets are seen at the 97.00 psychological level and at the weekly R2 (97.03).
GBP/USD Forecast: Price Technical Analysis – Valid Breakdown
The GBP/USD pair confirmed its breakdown below the 1.3353 static obstacle and now it has registered a new lower low of 1.3303. As you already know from my analysis, its failure to approach and reach the descending pitchfork’s upper median line (UML) signalled a potential drop to the median line (ML).
The median line (ML) acts as a magnet and it attracts the price. The current downside movement was somehow expected after escaping from the minor up channel, from the ascending pitchfork’s body.
Now it has ignored the warning line (wl1) and the weekly S2 (1.3334) signalling more declines. A minor rebound could help the sellers to catch a new bearish momentum towards the median line (ML).
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