The GBP/USD pair is trading at 1.3624 at the time of writing. In the short term, it has turned to the upside trying to recover after its correction. Still, the rebound could be only a temporary one. DXY's further growth could push the pair down. Now, the pair retests the near-term upside obstacles.
As you already know, the UK reported higher than expected inflation yesterday. The CPI rose by 5.4% versus 5.2% expected, while the Core CPI increased by 4.2% in December beating the 3.9% expected. Higher inflation is not necessarily good for the Pound.
Later today, the US Unemployment Claims could bring volatility and strong moves in GBP/USD. Better than expected US data could lift the greenback.
GBP/USD Bearish Pressure Remains Strong!
From the technical point of view, GBP/USD could extend its downside movement if it stays under the median line (ML) of the ascending pitchfork. You can see that it has failed to retest the 1.3650 weekly pivot point showing strong sellers around the median line (ML).
Technically, a new lower low, droping and closing below 1.3575 low could activate a borader corrective phase. Personally, I believe that only jumping and stabilizing above 1.3650 pivot point could invalidated a larger drop.
GBP/USD Outlook!
A new lower low, a valid breakdown below 1.3573 could confirm more declines and could represent a new selling opportunity.
