GBP/USD Bounces Off Trendline Support to Trade at 1.2134

The GBP/USD currency pair on Friday bounced off the trendline support at 1.2107 to trade at 1.2134 before funding resistance at the 100-hour moving average line. The currency pair continues to trade within a descending channel formation in the 60-min chart.

Friday’s rebound pushed the currency pair off the oversold conditions of the 14-hour RSI, and back to the normal trading zone. However, with the 100-hour MA providing strong resistance, a pullback seems inevitable.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading at the back of a relatively busy period in both markets. On Friday, the preliminary Uk gross domestic product for Q2 beat the expected (QoQ) change of -0.2% with a change of -0.1%. The (YoY) equivalent also outperformed the expectation of 2.8% with 2.9%, while the GDP for June outshone the (MoM) expectation of -1.3% with -0.6%.

Elsewhere, industrial production for June came in stronger with a change of -0.9% (MoM) versus the expectation of -1.3%. Manufacturing production for June also outperformed both the (MoM) and (YoY) estimates of -1.8% and 0.9%, respectively with -1.6% and 1.3%.

In the US, the preliminary Michigan consumer sentiment index for August beat the expectation of 52.5 with 55.1. Earlier in the week, the initial jobless claims narrowly beat 263k with 262k, while continuing claims missed 1.407 million with 1.428 million.

GBP/USD Technical Analysis (the 60-min Chart)

Technically, the GBP/USD currency pair appears to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.

Therefore, the bears will be looking to extend the current declines toward 1.2107 or lower to 1.2067. On the other hand, the bulls will be targeting short-term profits at about 1.2164, or higher at 1.2204.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair seems to be trading within an ascending channel formation. This indicates a long-term bullish bias in the market sentiment.

Therefore, the bulls will be looking to stretch the current gains toward 1.2294 or higher to 1.2466. On the other hand, the bears will look to pounce on profits at about 1.1980 or lower at 1.1806.

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