GBP/USD Forecast –Can British Pound Recover Above 1.2740 Vs US Dollar?

GBP/USD Forecast –Can British Pound Recover Above 1.2740 Vs US Dollar?

  • – The British Pound declined heavily and traded towards the 1.2660 level against the US Dollar.
  • – To initiate a recovery, there was a break above a short-term contracting triangle at 1.2700 on the hourly chart of the GBP/USD pair.
  • – Recently in the US, the Retail Sales report for July 2018 was released by the US Census Bureau.
  • – The outcome was above the market forecast of +0.1% as there was a rise of 0.5% in sales in July 2018 (MoM).

 

US Retail Sales

Recently in the US, the Retail Sales report for July 2018 was released by the US Census Bureau. The market was positioned for a rise of around 0.1% in sales in July 2018 compared with the previous month.

 

The actual result was above the market forecast of +0.1% as there was a rise of 0.5% in sales in July 2018. Looking at the Retail Sales ex Autos, there was a rise of 0.6%, more than the forecast of 0.3% and also more than the last revised reading of 0.2%.

 

However, the GBP/USD pair started an upside correction and it seems like the pair may perhaps move above the 1.2725 and 1.2740 resistance levels.

 

GBP/USD Technical Analysis

The British Pound fell sharply during the past few days from the 1.2950 swing high against the US Dollar. The GBP/USD pair broke the 1.2820, 1.2710 and 1.2680 support levels to move deep into the bearish zone.

 

GBP/USD Technical Analysis British Pound US Dollar

 

The pair is trading well below the 100 hourly simple moving average and formed a low at 1.2661. It is currently correcting higher and moved above the 23.6% fib retracement level of the last decline from the 1.2827 high to 1.2611 low.

 

More importantly, there was a break above a short-term contracting triangle at 1.2700 on the hourly chart of the GBP/USD pair. The next resistance on the upside for buyers is near the 1.2740 level, which was a support earlier.

 

Moreover, the 50% fib retracement level of the last decline from the 1.2827 high to 1.2611 low is positioned near the 1.2744 level. Therefore, it won’t be easy for GBP/USD to move above 1.2740-1.2744. Above this, the pair will most likely surge towards 1.2800. On the downside, supports are at 1.2700 and 1.2680.


Also published on Medium.

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