GBP/USD rebounded in the short term but the downside pressure remains high. It could approach and reach new lows anytime. Still, after its strong drop, it could come back to test and retest the resistance levels before dropping deeper. It's trading at 1.1966 at the time of writing, above today's low of 1.1922.
The currency pair extended its sell-off on Friday after the reported positive data. The greenback needs further support from the US economy to be able to extend its growth. Today, Durable Goods Orders are expected to drop by 3.7% versus 5.6% in the previous reporting period, Core Durable Goods Orders may register 0.1% growth, while Pending Home Sales are predicted to increase by 0.9%. Better-than-expected US data should boost the greenback.
GBP/USD Bearish Bias Intact!
As you can see on the H1 chart, the GBP/USD pair found temporary demand and is about to reach the minor downtrend line which stands as a dynamic resistance. The 1.2 psychological level and the weekly pivot point represent upside obstacles as well.
The bias is still bearish, but a short-term rebound is natural and expected. Technically, the rate needs to accumulate more bearish energy before extending its sell-off.
GBP/USD Forecast!
A new lower low, dropping, and closing below the 1.1914 level activate more declines. This scenario brings new shorts, S1 (1.1860) could be used as a downside target. In my opinion, the downside scenario (downside continuation) could be invalidated only by a valid breakout above the major downtrend line.
