The GBP/USD pair rallied in the short term and erased a big part of yesterday's losses. The rate was located at 1.1911 at the time of writing and it continues to stay below strong upside obstacles. Failing to take out the resistance levels could announce a new sell-off.
Fundamentally, the Pound received a helping hand from the UK Retail Sales indicator which reported a 0.6% growth versus a 0.5% growth expected, and from Gfk Consumer Confidence came in at -44 points versus -46 points estimated.
The US data could have an impact as well. The Existing Home Sales could drop from 4.71M to 4.41M, while CB Leading Index may report a 0.4% drop.
GBP/USD Flag Pattern!
As you can see on the H4 chart, the rate rebounded after failing to stabilize below the 1.1790 former low. Now, it has reached the downtrend line and 1.1904. These represented resistance levels and now it could turn to the downside.
Only a valid breakout above these levels may announce further growth. False breakouts through the resistance zone announce a new sell-off.
GBP/USD Forecast!
Testing and retesting the downtrend line and staying below 1.1904, registering only false breakouts could bring a new downside movement at least toward the 1.1790 support. This could be seen as a short signal.
A new long opportunity could be confirmed only by a valid breakout above 1.1958.
