The currency pair dropped as much as 1.2069 today where it has found demand. Now, it has rebounded and is trading at 1.2088 at the time of writing. After its massive drop, we cannot exclude a strong bounce back.
Today, the fundamentals could drive the price, that's why we have to be careful. The UK CBI Realized Sales came in at -36 points versus -16 points expected. Still, only the ECB and the US economic data could be decisive today. The ECB Press Conference and the Monetary Policy Statement could change the sentiment in the short term.
Furthermore, the US is to release the Advance GDP, Unemployment Claims, Advance GDP Price Index, Durable Goods Orders, Core Durable Goods Orders, and the Pending Home Sales figures. Positive US data should boost the greenback while poor data could weaken the USD again.
GBP/USD At Support!
From the technical point of view, the GBP/USD pair reached the median line (ml) of the descending pitchfork where it found support. The price action developed a potential Falling Wedge pattern which may announce a potential reversal in the short term.
Still, the bias remains bearish as long as it stays under the weekly S1 at 1.2100 even if the price jumps above the downtrend line.
GBP/USD Forecast!
Jumping and closing above the S1 (1.2100) activates a larger rebound. This is seen as a new buying signal.
A larger downside movement could be activated after making a bearish closure below 1.2069.
