The GBP/USD pair crashed in the short term as the Dollar Index rallied. DXY's leg higher boosted the greenback. Technically, the currency pair reached a resistance zone and now it has turned to the downside. After its strong growth, a sell-off is natural.
Still, today, the US retail sales data, PPI, Core PPI, and the UK Annual Budget Release could bring sharp movements in GBP/USD. The currency pair could extend its sell-off if the US data comes in better than expected.
GBP/USD Strongly Bearish!
Technically, the GBP/USD pair failed to stabilize above the weekly R1 (1.2160) signaling exhausted buyers. Personally, I've drawn a descending pitchfork hoping that I'll catch a new downside movement.
As you can see on the H1 chart, the rate tested and retested the upper median line (uml) registering only false breakouts. This stands as a dynamic resistance, so the bias is bearish as long as it stays below it.
Now, it is challenging the 1.2065 downside obstacle. After its massive sell-off, the price could try to rebound.
GBP/USD Forecast!
The aggressive breakdown below 1.2137 represented a selling opportunity. A valid breakdown below 1.2065 activates more declines and could bring a new bearish signal. The weekly pivot point of 1.1980 and the median line (ml) represent downside targets of the instrument which is carrying out its drop.
