GBP/USD Forecast – British Pound Could Extend Declines Vs US Dollar

GBP/USD Forecast – British Pound Could Extend Declines Vs US Dollar

  • – The British Pound traded above the 1.2900 level, but it failed to hold gains against the US Dollar.
  • – There was a break below a key bullish trend line with support at 1.2910 on the hourly chart of the GBP/USD pair.
  • – Recently in the US, the Existing Home Sales for July 2018 was released by the National Association of Realtors.
  • – The outcome was below the market forecast of +0.6% as there was a decline of 0.7% in sales in July 2018 2018 (MoM).

 

US Existing Home Sales

Recently in the US, the Existing Home Sales for July 2018 was released by the National Association of Realtors. The market was positioned for a rise of around 0.6% in sales in July 2018 compared with the previous month.

 

The actual result was below the market forecast of +0.6% as there was a decline of 0.7% in sales in July 2018 2018. It was also disappointing as compared to the last decline of 0.6%.

 

However, the GBP/USD pair struggled to hold gains above the 1.2910 and 1.2900 levels, resulting in a downside reaction.

 

GBP/USD Technical Analysis

The British Pound was in a nice uptrend as it climbed above the 1.2800 and 1.2850 resistance levels against the US Dollar. The GBP/USD pair even broke the 1.2900 level, but it later faced a solid resistance near the 1.2935 level.

 

GBP/USD Technical Analysis British Pound US Dollar

 

The pair formed as high as 1.2936 and later it started a downside correction. It declined and broke the 1.2910 and 1.2900 support levels. Moreover, there was a break below a key bullish trend line with support at 1.2910 on the hourly chart of the GBP/USD pair.

 

Moreover, the pair is also about to break the 23.6% fib retracement level of the last wave from the 1.2729 low to 1.2936 high. It seems like there was an increase in selling pressure as the pair is now trading well below the 1.2900 level.

 

The next major support on the downside is near the 1.2850 level and the 50% fib retracement level of the last wave from the 1.2729 low to 1.2936 high. If the pair corrects higher, the broken supports at 1.2900 and 1.2915 are likely to act as resistances in the near term.


Also published on Medium.

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