The GBP/USD currency pair on Friday plunged to trade closer to current weekly lows falling below the 1.4100 level. The currency pair continues to trade within a highly volatile sideways channel formation in the 60-min chart.
The pair now remains pinned below the 100-hour moving average following Friday’s pullback. The currency pair slipped to oversold levels before recovering to move back to the normal trading zone in the late trading hours.
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, UK factory output disappointed on all fronts. Manufacturing production for April missed the expected change of 1.5% (MoM) with a change of -0.3%. The (YoY) equivalent also missed 41.8% with 39.7%. Industrial production fell 1.3% (MoM) compared to an expected increase of 1.2%. The UK’s gross domestic product for the months also failed to match the (MoM) expectation of 2.4% with a change of 2.3%.
In the US, the preliminary Michigan Consumer Sentiment Index for June beat the expectation of 84 with 86.4. On Thursday, the initial jobless claims disappointed with 376k compared to an expectation of 370k. However, the US CPI ex-food and energy grew 3.8% in May to beat the expected growth rate of 3.4% (YoY). The (MoM) equivalent also outshone 0.4% with 0.7%. General CPI rose highest in 13 years after increasing by 5%. The market was expecting a change of 4.7%. It also beat the (MoM) expectation of 0.4% with 0.6%.
GBP/USD Technical Analysis (the 60-min Chart)
Technically, the GBP/USD currency pair appears to be trading within a highly volatile sideways channel in the 60-min chart. The pair recently plunged to the oversold levels of the 14-hour RSI.
The bears will be looking to extend the current pullback towards 1.4080 or lower to 1.4038. On the other hand, the bulls will target rebound profits at around 1.4143 or higher at 1.4182.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the GBP/USD currency pair appears to be trading within an ascending channel formation. This indicates a significant long-term bullish bias in the market sentiment. The pair recently pulled back to avoid crossing to overbought levels of the 14-day RSI.
The bulls will be looking to ride the current bull run by targeting profits at around 1.4258 or higher at 1.4428. On the other hand, the bears will target pullbacks at around 1.3953 or lower at 1.3778.