The GBP/USD pair dropped as much as 1.2691 today, registering a new low. Now, it has tried to rebound in the short term and is located at 1.2714 at the time of writing. The downside pressure remains high as the Dollar Index is struggling to extend its rebound.
Fundamentally, the UK reported higher inflation in May. The CPI came in at 8.7% compared to 8.4% expected, while Core CPI registered a 7.1% growth beating the 6.8% growth forecasted. The Canadian retail sales came in better than expected but it remains to see what impact will have on the USD as the Fed Chair Powell Testifies moves the markets at the time of writing. Tomorrow, the BOE, SNB, and the Fed Chair Powell Testifies should have a major impact.
GBP/USD Strong Downside Pressure!
From the technical point of view, the currency pair registered a new false breakout through the upper median line (uml) of the descending pitchfork signaling strong sellers. It challenges the weekly pivot point of 1.2720.
The false breakout through the confluence area formed at the intersection between the 1.2768 and the upper median line (uml) announced a potential downside continuation.
GBP/USD Forecast!
Stabilizing below the pivot point of 1.2720 and making a new lower low, closing below 1.2691 represents a selling signal with a target at the median line (ml). Also, new false breakouts through the upper median line (uml) could bring us new shorts as well.
