GBP/USD rebounded in the short term but this could be only a temporary growth. The bias remains bearish, so the pair could drop again anytime. The price action developed a potential continuation pattern. Confirming this formation could also bring new short opportunities.
The pair increased as high as 1.3472 level today also because the British pound received a helping hand from the UK Unemployment Rate which dropped from 4.5% to 4.3% below 4.4% expected, while the Average Earnings Index registered a 5.8% growth versus 5.5% expected.
Still, the upside seems limited as the US data come in better than expected earlier today. Both Retail Sales and the Core Retail Sales indicators reported a 1.7% growth in October beating expectations. Also, Industrial Production and the Capacity Utilization Rate come in better than expected as well which is good for the USD.
GBP/USD up channel
GBP/USD printed an up channel which is seen as a continuation pattern. A breakdown through the channel's uptrend line could announce a new downside movement. It has failed to stabilize above 1.3457 weekly pivot point signaling bearish pressure.
The currency pair failed to reach 1.3484 static resistance, so the sellers could take full control again. Still, we have to wait for confirmation and for a fresh new short opportunity.
GBP/USD forecast
Escaping from the current channel and making a new lower low, a bearish closure below 1.3404 could bring a new short opportunity. This scenario could open the door for a potential drop at least until 1.3353 lower low.
The material has been provided by InstaForex Company - www.instaforex.com