The GBP/USD pair dropped in the short term as the Dollar Index rebounded after its last sell-off. Still, the DXY remains under strong downside pressure, more declines after ending its rebound may force the USD to depreciate.
As you already know from my yesterday's analysis, GBP/USD could extend its growth if it jumps and stabilizes above the 1.2498 key level. Fundamentally, the USD took a hit from the US economic data yesterday. Today, the UK Gfk Consumer Confidence came in at -40 points below -39 points expected. Later, the UK Retail Sales indicator is expected to report a 0.3% drop in April.
GBP/USD Minor Retreat!
GBP/USD found resistance at the weekly R2 (1.2520) and now it has retreated a little. It's located right above the 61.8% retracement level and above the ascending pitchfork's upper median line (uml). As long as it stays above these levels, the GBP/USD pair could resume its growth.
1.2498 stands as a key level, so only a valid breakout through this level could signal an upside continuation.
GBP/USD Outlook!
A valid breakout above 1.2498 and a new higher high, jumping and closing above 1.2524 could activate an upside continuation and could bring new long opportunities with a potential upside target at the 1.2639 level.
