GBP/USD extends the downtrend momentum for eighth consecutive session after peeking to 1.3227 high yesterday. The pair failed to press forward and hold gains, taking a dip to a 1.3113 low, and closed at 1.3131. Currently, the pair is trading narrow with 20-pips price action after hitting 1.3116 low support, but expectations for higher volatility as the U.K. releases its quarter GDP shortly.
Technically, on the chart we can notice that GBP/USD is capped inside a wedge triangle and has been touching the boundaries but failing to close neither above the descending trend line nor below the ascending one, putting the pair in a state of congestion in case the daily price manages to close above or below both lines.
Fundamentally, GBP/USD is traded cautiously. First, Brexit negotiations still weighs negatively on the pair favouring a selloff mood and, last week Bank of England Governor Mark Carney was noticed to be less hawkish than in previous press conferences held/ But a rate hike in November is still on the table and open to discussion, which keeps the cable on solid ground preventing it from severe losses. Today, expectations are placed for GDP at 3% as recorded previously. The market stands on two potential scenarios. First, in the case GDP scores 3% or above, this should be taken as a booster. Second, if GDP misses the 3% target, then adding all the negative elements above, the market should expect a heavier abandon for GBP/USD and extending the bearish momentum.
Technical Overview GBP/USD:
Closing price: 1.3116
Target price: None
Resistance levels: 1.3154 , 1.3200, 1.3248
Support levels: 1.3114 , 1.3080 , 1.3030
Trend: Sideways / Down
Trend reversal price: 1.3226*
General overlook: The market is still caught is a secondary decline. Near term trade is working through corrective congestion, but retains the bear bias. A close under 1.3080 should open up a fresh bear leg. Near term trade may yet try to congest around 1.3154 +/- . A close over 1.3226* and 1.3260* are the triggers for a re-turn into higher prices.