GBP/USD Price Finds No Respite, Eying 1.16 as USD Bulls Intensify

GBP/USD Price Finds No Respite, Eying 1.16 as USD Bulls Intensify

  • The GBP/USD pair maintains a bearish bias as long as it stays below the median line (ml).
  • The S2 is seen as an important downside target.
  • Its false breakout above the former high confirmed that the rebound ended.

The GBP/USD price crashed after failing to modestly recover ground. It was trading at 1.1665 at the time of writing. It seems quite pressured by the bears.

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The USD took the lead and dragged the price down as the Dollar Index ended its minor correction after reaching new highs. Today, the UK banks will be closed. Only the FOMC Member Brainard could bring life to the GBP/USD pair.

Tomorrow, the M4 Money Supply, Mortgage Approvals, and Net Lending to Individuals could bring some action. Still, the US JOLTS Job Openings and the CB Consumer Confidence data could be decisive as the indicators are high-impact.

Dollar Index Price Technical Analysis: Key resistance at 109.29

The Dollar Index retreated a little after its strong growth. The short-term drop was natural before extending its upwards movement. It remains bullish as the Federal Reserve is expected to continue hiking rates. A 50bps hike is expected in September. That’s why the index is strongly bullish.

As you can see on the hourly chart, the DXY found support on the ascending pitchfork’s median line (ml), which now challenges the 109.29 static resistance. A valid breakout may confirm further growth. This scenario could help us to catch new USD longs.

GBP/USD Price Technical Analysis: No respite for bulls

GBP/USD price

The GBP/USD pair registered only a false breakout above 1.1877, signaling a fakeout and triggering a fresh selling wave. Now, it has ignored the median line (ml) and the 1.1716 downside obstacles confirming a downside continuation.

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After its massive drop, we cannot exclude the probability of a temporary rebound. The price could come back to test the 1.1700 psychological level and the median line (ml) before extending its drop.

The weekly S1 (1.1670) represented a potential downside target. Stabilizing below this level could activate more declines towards the weekly S2 (1.1600). Also, as long as it stays under the median line (ml), the GBP/USD pair could also approach and reach the lower median line (LML).

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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.