The GBP/USD changed little today, but it should drop further in the upcoming period after the breakdown in the seller’s territory. Price decreased significantly in the yesterday’s session, but I’ve said in the previous article that it could come back to test and retest the broken levels before will touch fresh new lows.
Technically, it seems like it has lost the bearish momentum, but this situation could be only temporary. It should drop further after the valid breakdown from the extended sideways movement.
You should know that the UK and the Euro-zone data should bring life on this pair later. The United Kingdom’s Average Earnings Index could increase by 3.0%, more versus the 2.8% estimate, the Claimant Count Change may increase as well from 9.2k to 13.3K, while the Unemployment Rate could remain steady at 4.3% for the second month in February.
The German ZEW Economic Sentiment could drop in the negative territory, from 5.1 points to -0.8, while the Euro-zone ZEW Economic Sentiment could slip from 13.4 to 7.3 points. The Italian Trade Balance could increase significantly from -0.09B to 2.23B and could help the Euro a little.
The EUR/GBP retested the first warning line (WL1) of the major ascending pitchfork and now is pressuring the lower median line (lml) of the minor ascending pitchfork. I’ve drawn the minor pitchfork only to see the short-term direction. A failure to stay above the lower median line and inside the pitchfork’s body will signal a high selling pressure. I’ve said in the previous article that the rate could drop towards the fourth warning line (wl4) of the former descending pitchfork.
However, it could climb towards the WL1 again and towards the 61.8% retracement level if will have enough directional energy to stay within the minor ascending pitchfork’s body.