FX.co ★ GBP/USD

GBPUSD GBP/USD had a big sell off today, hitting a new weekly low. This could have massive implications for the whole market. The daily candlestick shows the sellers are biased bearish with a long upper wick indicating a possible aggressive bearish stance by the market. The hourly chart is showing a strong and steady downtrend. Prices are well below the Ichimoku cloud, a major technical indicator that is showing a strong bearish bias. This is a great opportunity to start shorting, you can actively look for the best entry points and benefit from the current trend. Additionally, oscillator/stochastic indicators also confirm this downward momentum which adds to the bearish signal. For the time being, BGBPUSD is trending down in the ongoing trading session with no signs of reversal. This has allowed bears a foothold below the first support at 1.3100. 1.3120 is a psychologically sensitive level and a break below could trigger further downside pressure. A classic pivot reversal level is a major indicator of an intraday decline and a solid anchor for bearish players. The technical analysis is too bearish so it would be fair to see BGBPUSD continue its downward journey from current levels towards the second support level at 1.3030. Below this level, another consolidation could start a new wave of decline and a possible break below the support around 1.2980, which is a key milestone marking the bottom of the market. On the other hand, a possible upside scenario is contingent on a dramatic and unexpected market rebound. Bulls will have to show some serious strength to break through the strong resistance at 1.3235 which has been a ceiling for a few trading sessions. Traders need to understand that volatile markets create opportunities that can develop quickly and they should watch key levels and indicators carefully to adjust their strategies and capitalise on possible market trends.

GBP/USD: The GBP/USD pair is trading at 1.3420 on Wednesday, showing a slight rise of 0.03% at the time of writing as investors process the most recent UK inflation statistics and evaluate the monetary policy outlook on both sides of the Atlantic. According to data previously issued by the Office for National Statistics (ONS), the UK Consumer Price Index (CPI) increased year over year from 3% in February to 3.3% in March, in line with market predictions. Additionally, monthly inflation increased by 0.7%, above the prediction of 0.6% and being the biggest increase in almost a year. Underlying price pressures, however, seemed to lessen; core inflation, which does not include food, energy, alcohol, and tobacco, increased by 3.1% annually, marginally less than the anticipated 3.7%. The reduction in core inflation may allow the Bank of England (BoE) to keep its benchmark interest rate at 3.75% at its next meeting on May 31, despite the increase in headline prices brought on by increased energy costs as a result of Middle East tensions. Positive surprises were also provided by producer and retail pricing statistics, in addition to the inflation data. In April, the input price index grew by 4.3% monthly and 5.22% yearly, while retail prices increased by 0.83% month over month and 4.1% year over year, all of which exceeded market expectations. Strong domestic economic data, however, is providing support for the US dollar. The US Census Bureau announced on Tuesday that retail sales increased by 1.7% month over month in March, much above both the revised 0.7% increase in February and the 1.4% projection. In keeping with the prior reading, retail sales increased by 4% annually. A number of important British indicators are slated to be released in the coming days, so investors should proceed with caution: preliminary S&P Global Purchasing Managers' Index (PMI) figures for April are expected to be released on Thursday, while retail sales data for March is expected to be released on Friday. The British pound (GBP) may become more volatile as a result of both occurrences.