GBP/USD Forecast – British Pound In Monstrous Uptrend Vs US Dollar

GBP/USD Forecast – British Pound In Monstrous Uptrend Vs US Dollar

  • – The British Pound declined recently and moved below a key support of 1.2950 against the US Dollar.
  • – There are two bearish trend lines forming with resistance at 1.2950 and 1.2980 on the hourly chart of GBP/USD.
  • – Today in the UK, the Consumer Price Index for July 2017 was released by the National Statistics.
  • – The outcome was below the forecast of +2.7%, as there was an increase of 2.6% (YoY).

 

UK’s CPI

Recently in the UK, the Consumer Price Index for July 2017 was released by the National Statistics. The market was positioned for an increase of 2.7% in the CPI compared with the same month a year ago.

 

However, the actual result was below the forecast of +2.7%, as there was an increase of 2.6%. In terms of the monthly change, there was a decline of 0.1%, whereas the forecast was 0%. On the other hand, the Producer Price Index posted an increase of 3.2% in July 2017 compared with the same month a year ago, which was more than the forecast of +3.1%. The report added that:

Factory gate prices (output prices) rose 3.2% on the year to July 2017, from 3.3% in June 2017, which is a 0.5 percentage points decline from their recent peak of 3.7% in February and March 2017.

 

Overall, the result was negative and could add further bearish pressure on GBP/USD, resulting in declines towards 1.2900.

 

GBP/USD Technical Analysis

The British Pound consolidated for a long time above the 1.2970 against the US Dollar. Later, the GBP/USD pair failed to hold the 1.2970-50 support area and declined sharply below the 1.2950 level.

 

GBP/USD Technical Analysis British Pound US Dollar

 

The pair recently traded as low as 1.2910 and currently attempting a recovery. On the upside, there are two bearish trend lines forming with resistance at 1.2950 and 1.2980 on the hourly chart of GBP/USD.

 

An initial resistance is around the 23.6% Fib retracement level of the last decline from the 1.3030 high to 1.2910 low. However, the broken support near 1.2950 is a major resistance since it is also the 38.2% Fib retracement level of the last decline from the 1.3030 high to 1.2910 low.

 

Overall, selling rallies in the near term towards the 1.2950-70 level for a test of the 1.2900 handle.

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