The GBP/USD pair was trading at 1.2323 at the time of writing. The price is fighting hard to rebound but the downside pressure remains high. The bias remains bearish, so further downside movement is in the cards.
Fundamentally, the USD remains bullish as the FED is expected to hike rates again at the next monetary policy meeting. Today, Fed's Mester sustained a 75 bps hike it is not ruled out. Still, a 50 bps hike in the next two meetings is favored. The Pound took a hit from the BRC Retail Sales Monitor which dropped by 1.7% even if the traders expected a 3.5% growth.
Tomorrow, the volatility could be high as the US is to release its inflation data. The CPI is expected to report a 0.2% growth, while the Core CPI may register a 0.4% growth in April.
GBP/USD Sideways Movement!
As you can see on the H1 chart, the GBP/USD pair tested and retested the descending pitchfork's lower median line (lml). 1.2300 former low and psychological level stands as static support.
Now, it challenges the minor uptrend line after registering only false breakdowns below 1.23. Techncially, the bias remains bearish as long as it stays under the lower median line (lml).
GBP/USD Forecast!
A valid breakdown below 1.2300, dropping and closing below it may signal a further drop at least towards the 1.2251 key level. A larger sell-off could be activated by a valid breakdown below this major support.
