The GBP/USD pair was dropping like a rock at the time of writing, trading near the 1.3576 level. In the short term, the pressure is high, so more declines are in cards as long as the Dollar Index continues to grow. Technically, the pair confirmed a corrective phase, so we'll have to wait for the retreat to end before considering to go long again.
GBP/USD drops only because the USD is boosted by the DXY's rally. Fundamentally, the UK economic indicators reported positive data, but the British pound wasn't able to take the lead again. The Unemployment Rate was reported at 4.1% below 4.2% expected, the Claimant Count Change was published at -43.3K under the -38.6K expected, while the Average Hourly Earning came in line with expectations.
GBP/USD massive bearish pressure
As you can see on the h4 chart, the rate registered a valid breakdown below the uptrend line and under the weekly pivot point of 1.3650. Now, it has ignored the median line (ML) of the Ascending Pitchfork and the 23.6% retracement level, so it could approach and reach fresh new lows and downside obstacles.
A minor rebound could bring new selling opportunities. GBP/USD could come back to test and retest the median line (ML) before extending its sell-off.
GBP/USD is in a corrective phase. It could develop a larger downside movement as long as it stays under the 23.6% (1.3613) retracement level. The immediate downside obstacles are represented by the weekly S1 (1.3552) and by the 38.2% retracement level. After its amazing sell-off, we cannot exclude a temporary rebound.
Testing and retesting the 23.6% and the median line (ML), a minor rebound, could bring new selling opportunities. A larger downside movement could be invalidated if the rate comes back and stabilizes above the median line.