The GBP/USD currency pair on Thursday pulled back off current multi-year highs of about 1.2948 to trade at about 1.2906. The currency pair trades within a descending channel formation in the 60-minute chart.
The pair has now descended to trade closer to the 100-hour moving average line. Thursday’s pullback pushed the pair off the overbought levels back to the normal trading range of the 14-hour RSI.
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 Thursday, the US initial jobless claims for the week ending July 5 beat the expected claim count of 236k with a tally of 222k, down from the previous week’s equivalent of 239k.
The US consumer price index for June missed the forecasted change of 0.1% with a change of -0.1% (MoM), down from 0% in May. The (YoY) equivalent also edged lower to 3% down from 3.3%, missing the forecast of 3.1%. The consumer price index ex-food and energy also fell short of the forecasted (MoM) and (YoY) expectations of 0.2% and 3.4%, respectively with changes of 0.1% and 3.3%.
In the UK, the gross domestic product for May exceeded expectations of 0.2% with a change of 0.4% (MoM). Industrial production for the period matched the (MoM) forecast of 0.2% but fell short of the expected (YoY) change of 0.6% with 0.4%. The manufacturing production for the period also failed to match the forecasted (YoY) change of 1.2% with a change of 0.6%, while the (MoM) equivalent was in line with the estimate of 0.4%.
GBP/USD Technical Analysis (the 60-min Chart)
Technically, the GBP/USD currency pair has recently pulled back, forming a descending channel. As a result, the 14-hour RSI also pulled back to return to the normal trading range amid a change in the market sentiment.
Therefore, the bears will be targeting extended pullbacks at about 1.2867 or lower at 1.2827. On the other hand, the bulls will look to pounce on profits at about 1.2948 or higher at 1.2990.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the GBP/USD currency pair is trading within an ascending channel formation. The 14-day RSI also seems to support a long-term bullish bias as it ascends closer to overbought conditions.
Therefore, the bulls will be looking to ride the current rally towards 1.3057 or higher to 1.3205. On the other hand, the bears will look to pounce on pullbacks at about 1.2785 or lower at 1.2625.