GBP/USD Forecast – British Pound Drops Sharply Vs US Dollar
- – The British Pound failed to move above the 1.3270 resistance and declined sharply against the US Dollar.
- – There was a break below a key bullish trend line with support at 1.3150 on the hourly chart of the GBP/USD pair.
- – Recently in the US, the Total Net TIC Flows report for May 2018 was released by the US Department of Treasury.
- – The outcome was above the forecast of $52.3B as the Total Net TIC Flows came in at $69.9B.
US Total Net TIC Flows
Recently in the US, the Total Net TIC Flows report for May 2018 was released by the US Department of Treasury. The market was positioned for the Total Net TIC Flows to be $52.3B, less than the last $138.7B.
The actual was above the forecast of $52.3B as the Total Net TIC Flows came in at $69.9B. Moreover, the last reading was revised up from $138.7B to $233.1B. Looking at the Net Long-Term TIC Flow, there was a decline from the last revised reading of $94.0B to $45.6B.
The GBP/USD pair recently made a sharp downside move and broke a few important supports to move into a bearish zone below 1.3200.
GBP/USD Technical Analysis
The British Pound was placed nicely above the 1.3250 level earlier this week against the US Dollar. The GBP/USD pair faced a strong resistance zone near 1.3270-80, which resulted in a sharp decline below the 1.3200 level and the 100 hourly simple moving average.
Moreover, there was a break below a key bullish trend line with support at 1.3150 on the hourly chart of the GBP/USD pair. It even broke the 1.3100 support area and traded as low as 1.3070. It corrected higher and is currently trading near the 23.6% fib retracement level of the last decline from the 1.3268 high to 1.3070 low.
The pair may perhaps correct a few pips towards the 1.3140 level where it is likely to face sellers. Above this, the next resistance is near 1.3190 and the 50% fib retracement level of the last decline from the 1.3268 high to 1.3070 low.
Overall, the pair has moved into a bearish zone below 1.3200, and any corrections from the current levels are likely to face sellers near 1.3140 and 1.3190.
Also published on Medium.
