GBP/USD is trading in the red at 1.3328 and it seems heavy enough to continue to drop in the short term. The most recent upside false breakout signals that the pair could print a corrective phase.
The Pound drops even if the UK's Manufacturing and Industrial Production have come in better than expected. The GDP increased by 0.4% as expected, but the no-deal Brexit rumors lead the rate down.
Moreover, the US inflation data could bring more volatility and action on GBP/USD. The CPI and Core CPI are expected to increase by 0.1% versus 0.0% in the previous report.
GBP/USD Corrective Phase!
As you can see on the H4 chart, GBP/USD failed to stabilize outside of the up-channel pattern signaling exhausted buyers. It has registered three false breakouts above the third warning line (wl3) indicating a corrective phase.
It has also failed to stabilize above the Pivot Point (1.3419) in the most recent attempt, a bearish closure under the S1 (1.3298) could really signal a further decline towards the S2 (1.3166).
- GBP/USD Trading Scenarios
Yesterday's bearish engulfing printed the third warning line (wl3) suggested a short opportunity. The second warning line (wl2) and the up channel's downside line are seen as major downside targets.
Closing below the S1 (1.3298) could be taken into account as a selling signal as well. The S2 (1.3166) could be used as an immediate target.
