GBP/USD seems undecided right now, but you should be ready for an aggressive move very soon. Price has started to move somehow sideways, so it could increase again if it will continue to stay above the 1.2700 psychological level.
However, we still need a confirmation that the rate will jump much higher again. It is trapped below some very important resistance levels, so only a valid breakout could announce a potential leg higher.
Fundamentally, the USD could decrease again as the United States data have disappointed. The Non-Farm Employment Change was reported at 155K, much below the 198K estimate and below the 237K in the former reading period, while the Average Hourly Earnings increased only by 0.2%, less versus the 0.3% estimate.
The Unemployment Rate remained steady at 3.7%, matching expectations. The US is to release also the Prelim UoM Consumer Sentiment, the Final Wholesale Inventories, Prelim UoM Inflation Expectations, and the Consumer Credit.
The USD has taken a hit from the yesterday’s data as well. The AADP Non-Farm Employment Change was reported at 179K, below the 195K estimate and versus the 225K in the former reading period, the Unemployment Claims decreased from 235K to 231K jobs in the previous week, but have failed to reach the 226K estimate, while the Trade Balance decreased from -54.6B to -55.5B. The Final Services PMI increased to 54.7, beating the 54.4 estimate, but unfortunately, the Factory Orders dropped by 2.1%.
USDX continues to pressure the outside sliding line (SL1) of the major descending pitchfork and it could reach the upside 50% Fibonacci line as well. It has tried to increase, but it has failed. I want to remind you that a valid breakdown below the 50% line and below the sliding line (SL1) will announce a further drop and the USD’s drop.
The perspective remains bullish as long as the rate stays above the mentioned near-term dynamic support lines.
GBP/USD is trading in the red, but it continues to stay above the median line (ml) of the descending pitchfork and above the 1.2661 static support. It could rebound if it will stay above these levels. A valid breakout above the upside 50% Fibonacci line of the descending pitchfork it will confirm a potential rebound.
However, a valid breakdown below the 1.2661 will confirm a further drop at least till the first warning line WL1 of the major ascending pitchfork. Price could still drop as long as the rate stays below the upside 50% Fibonacci line of the descending pitchfork.