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GBP/USD – British Pound Broke Uptrend Support Vs US Dollar?

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Aayush Jindal

Key Highlights

  • The British Pound after trading as high as 1.3047 against the US Dollar made a downside move.
  • The GBP/USD pair recently broke a crucial channel support at 1.2920 on the daily chart, which can be considered as a bearish break.
  • In the UK, the GfK Group Consumer Confidence for May 2017 released today posted a rise from -7 to -5.
  • In the Euro Zone today, the preliminary CPI reading for May 2017 will be released by the Eurostat, which is forecasted to increase by 1.5% (YoY).

GBP/USD Technical Analysis

The British Pound moved above 1.3000 this past week against the US Dollar. Later, the GBP/USD pair made a short-term top at 1.3047, and broke a major support area for further declines.GBP/USD Technical Analysis British Pound US DollarLooking at the daily chart, the pair clearly had a good bullish run once it broke the 1.2760 resistance area. It formed an ascending channel, but recently broke it at 1.2920 to ignite a downside move.The pair also cleared the 23.6% Fibonacci retracement level of the last wave from the 1.2365 low to 1.3047 high.However, the British Pound buyers protected losses below 1.2770-60. The stated area was a major resistance, and now holding losses below 1.2750. As long as the pair is above the 1.2750 support, and the 38.2% Fibonacci retracement level of the last wave from the 1.2365 low to 1.3047 high, it may bounce back.On the flip side, if there is a breakdown, GBP/USD could extend declines towards 1.2700.

GfK Group Consumer Confidence

Today in the UK, the GfK Group Consumer Confidence for May 2017 was released. The market was expecting a decrease from the last reading of -7 to -8.The actual result was better, as the GfK Group Consumer Confidence increased to -5. However, the result failed to help GBP/USD, as the pair remained at a risk of a break below 1.2760.

Economic Releases to Watch Today

  • German Retail Sales for April 2017 (MoM) – Forecast 0.2%, versus 0.1% previous.
  • German Retail Sales for April 2017 (YoY) – Forecast 2.3%, versus 2.3% previous.
  • Germany’s Unemployment Change for May 2017 - Forecast -15K, versus -15K previous.
  • Germany’s Unemployment Rate for May 2017 – Forecast 5.7%, versus 5.8% previous.
  • Italian Consumer Price Index for May 2017 (YoY, Preliminary) - Forecast +1.5%, versus +1.9% previous.
  • Euro Zone CPI for May 2017 (YoY, Preliminary) - Forecast +1.5%, versus +1.9% previous.
  • Euro Zone Core CPI for May 2017 (YoY, Preliminary) - Forecast +1%, versus +1.2% previous.
  • Canadian Gross Domestic Product for March 2017 – Forecast +0.2%, versus 0% previous.
  • US Pending Home Sales for April 2017 (MoM) - Forecast +0.3%, versus -0.8% previous.
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