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  • The GBP/USD pair could be attracted by the lower median line (LML).
  • Breaking below the median line (ml) and through the 23.6% activated a deeper drop.
  • The false breakout above the upper median line (UML) announced that the rebound had ended.

The GBP/USD price dropped like a rock as the Dollar Index managed to erase today’s losses. Technically, the rebound ended, and now it could resume its downtrend. The bias is bearish, so more declines are expected.

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The pair is trading at 1.3080 at the time of writing. It could hit new lows soon as the pressure is high. As you already know from my previous analyses, the GBP/USD pair was expected to register only a temporary swing higher after its last massive drop. However, the price failed to stabilize in the buyers’ territory, signaling a new sell-off.

Fundamentally, the British Pound has taken a hit from the United Kingdom Retail Sales, which dropped by 0.3% even if the traders expected a 0.6% growth. While the Gfk Consumer Confidence was reported at -31 points below -30 points expected. Earlier, the US data came in mixed. The Prelim Wholesale Inventories dropped by 2.1% versus 1.3% expected compared to 1.1% in the previous reporting period, which is good for the USD. On the other hand, the Goods Trade Balance indicator was reported at -106.6B below -104.4B estimates.

GBP/USD price technical analysis: Bearish reversal

gbp/usd price

The GBP/USD pair plunges after registering a valid breakout below the ascending pitchfork’s median line (ml) and 23.6% (1.3151). The median line (ml) represented dynamic support. However, the breakdown signaled that the upside was over and that more declines were expected. It challenges the weekly S1 of 1.31, which represents static support.

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From the technical point of view, breaking through the uptrend line signaled that the buyers were exhausted and that the sellers could take full control. After registering only a false breakout above the upper median line (UML), the GBP/USD pair could be attracted by the ascending pitchfork’s lower median line (LML).

A valid breakdown below this dynamic support could open the door for a larger drop. Still, after the current sell-off, the price could try to rebound in the short term. A potential bounce-back could help the sellers to catch a new bearish momentum.

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