GBP/USD is trading at 1.3772 level below 1.3808 yesterday's high. It remains to see what will really happen as the US is to release high-impact economic data during the day. Positive figures could help the dollar to take the lead again, so GBP/USD could slip lower.
As you already know, the USD is into a corrective phase as the USDX has developed a swing lower in the short term. The US economic figures could change the sentiment again. A USDX's rally started from today could force the greenback to appreciate again versus its rivals.
The Retail Sales could increase by 5.8% in March versus a 3.0% drop in February, while the Core Retail Sales may register a 5.1% growth after the 2.7% drop in February. The Unemployment Claims are expected to drop from 744K to 703K in the last week, the Industrial Production could increase by 2.7% after a 2.2% drop in the last reporting period, while the Capacity Utilization Rate could jump from 73.8% to 75.6%.
GBP/USD Vulnerable To Drop Deeper!
GBP/USD breakdown below the major red uptrend line signaled a broader corrective phase. Still, we need confirmation before going short on this pair. The price moves sideways in the short term, so only a new lower low could really validate a downside movement.
It's trapped within a down channel and now is traded outside of the minor ascending pitchfork. GBP/USD is located above the daily pivot of 1.3776 and beyond the weekly pivot point (1.3763).
Dropping and stabilizing under these levels could signal that the pair may start decreasing again. The downtrend line, the channel's resistance is seen as a major resistance.
Staying below the ascending pitchfork's lower median line (lml) could indicate a minor Head & Shoulders pattern.
The reversal pattern could be activated by a valid breakdown below the 1.3673 level, buy a new lower low. On the other hand, we could look for buying opportunities if the rate jumps and stabilizes above the downtrend line.
GBP/USD Outlook!
In the short term, dropping and staying below the daily S1 (1.3744) is seen as a selling signal. Also, a new lower low, bearish closure below 1.3673 could validate the H&S and could bring a broader drop.
Technically, jumping and closing above the R1 (1.3806) brings a buying opportunity in the short term with a first target at the downtrend line.
The material has been provided by InstaForex Company - www.instaforex.com