GBP/USD Bounces Off Trendline Support to Trim Session Losses

The GBP/USD currency pair on Friday bounced off the trendline support at about 1.2022 to trade at 1.2072. The currency pair continues to trade within a descending channel formation in the 60-min chart.

The pair has now fallen to trade several levels below the 100-hour moving average line. However, Friday’s late rebound helped the currency pair to recover from the oversold conditions of the 14-hour RSI.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD is trading at the back of a relatively busy period in both markets. On Friday, the US jobs data for July came in stronger than expected with 528 new jobs versus the market forecast of 250k.

Moreover, the unemployment rate fell to 3.5% down from 3.6% in June, also beating the consensus expectation of 3.6%. Elsewhere, the average hourly wage increased by 5.2% on a year-over-year basis, beating the average estimate of 4.9%. The (MoM) equivalent also outshone 0.3% with 0.5%.

In the UK the bank of England raised the base interest rate by 50 basis points to 1.75%, in line with expectations. Earlier in the week, the UK S&P Global/CIPS PMI Composite for July missed the expectation of 52.8 with 52.1, while the services PMI came short of 53.3 with 52.6.

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

Technically, the GBP/USD currency pair seems 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 1.2022 or lower to 1.1964. On the other hand, the bulls will be targeting short-term rebound profits at about 1.2122, or higher at 1.2184.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair seems to be training within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.

Therefore, the bears will be looking to retain control of the currency pair by targeting profits at about 1.1924 or lower at 1.1766. On the other hand, the bulls will look to pounce on profits at about 1.2235, or higher at 1.2387.

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