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  • The GBP/USD pair is bearish as long as it stays under the immediate downtrend line.
  • A new lower low activates more declines.
  • The US inflation data could be decisive on Thursday.

The GBP/USD price dropped in the last few days. The pair is trading at 1.1051 at the time of writing.

The bias is bearish as the Dollar Index is bullish. DXY’s further growth should help the greenback to dominate the currency market. Fundamentally, the USD remains strong despite temporary retreats as the Federal Reserve is expected to continue hiking rates in the next monetary policy meetings.

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The US inflation data on Thursday and the retail sales figures on Friday could be decisive and are seen as high-impact events. Also, the FOMC Meeting Minutes and PPI could shake the markets on Wednesday.

Today, the US banks will be closed in observance of Columbus Day. Tomorrow, the UK is to release the Average Earnings Index, which is expected to register a 5.9% growth, Claimant Count Change, Unemployment Rate, and BRC Retail Sales Monitor.

As you already know, the USD rallied in the short term as the Non-Farm Employment Change came in at 263K in September versus 248K expected, the Unemployment Rate dropped from 3.7% to 3.5% below 3.7% expected, while Average Hourly Earnings reported at 0.3% growth matching expectations.

GBP/USD price technical analysis: Downside bias

GBP/USD price

From the technical point of view, the price failed to stabilize above the major descending trendline signaling that the swing higher could be over. Now, the pair has dropped below the ascending trendline, indicating more declines.

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The 1.1024 level represents strong support. The bias is bearish as long as it stays under the immediate descending trendline. After dropping below the ascending trendline, the GBP/USD pair retested it and the 1.1100 psychological level. However, only breaking below 1.1024 may activate more declines. The 1.0931 is another strong support level. A larger downside movement could be activated only under this level.

Still, we cannot exclude a rebound after its strong downside movement. A valid breakout through the minor downtrend line may activate a strong rebound towards the 1.1200 psychological level and up to the major downtrend line.

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