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  • The bias remains bullish despite minor retreats.
  • The false breakdown with great separation signaled strong upside pressure.
  • The US inflation figures could be decisive tomorrow.

The GBP/USD price rallied in the short term. The pair is trading at 1.2267 far above today’s low of 1.2205. 

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The bias remains bullish despite temporary retreats. So, further growth remains favorable. Fundamentally, the price retreated a little as the US PPI, Core PPI, and Prelim UoM Consumer Sentiment came in better than expected on Friday. 

Today, the Pound received a helping hand from the UK data. The Gross Domestic Product rose by 0.5% beating the 0.4% growth expected, Construction Output surged by 0.8% versus the 0.1% growth estimated, Goods Trade Balance came in at -14.5B compared to -15.4B forecasts, Industrial Production reported a 0.0% growth even though the traders expected a 0.1% drop, while Manufacturing Production registered a 0.7% growth. 

In addition, the UK Rightmove HPI came and Index of Services disappointed. Tomorrow, the UK is to release the Claimant Count Change which is expected at 3.5K. Still, the US inflation could really shake the markets tomorrow. 

The CPI may report a 0.3% growth in November versus the 0.4% growth in October, CPI y/y could be reported at 7.3%, while Core CPI could register a 0.3% growth in the previous month. Also, the UK inflation data and the FOMC could move the rate on Wednesday. 

GBP/USD price technical analysis: Bullish bias

Gbp/usd price

Technically, the pair dropped a little in the short term within a down channel. This flag signaled a new upside momentum. 

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As you can see, the price found strong support right below the 1.2234 and under the weekly pivot point of 1.2240. Now it has turned to the upside. 

The pair has registered only a false breakdown with great separation through the uptrend line confirming exhausted sellers and strong upside pressure. The 1.2293 is seen as the next upside target. Taking out this resistance may signal further growth. After the current rally, we cannot exclude temporary and minor retreats before reaching new highs. 

The 1.2322 higher high represents an upside target and obstacle as well. A new higher high validates an upside continuation. 

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