On Wednesday, the GBP/USD currency pair pulled back from the session highs of about 1.3362 to trade at about 1.3260. The currency pair also completed a downward breakout from an ascending channel formation in the 60-minute chart.

As a result, the currency pair has plummeted to trade next to the 100-hour moving average line. Wednesday’s pullback pushed the pair closer to the oversold levels of the 14-hour RSI.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair trades during a relatively busy period in both markets. On Tuesday, the U.S. consumer price index for April missed the expected (MoM) change of 0.3% with a change of 0.2%, up from -0.1% in March. The (YoY) equivalent fell to 2.3%, down from 2.4% in the preceding period, missing the forecast of 2.4%.

On the other hand, the consumer price index ex-food and energy missed the (MoM) expectation of 0.3% with 0.2%, down from 0.1%, while the (YoY) equivalent was in line with the estimate of 2.8%, unchanged from the previous period.

In the UK, the claimant count change for April increased to 5.2k, up from -16.9k in March, beating the forecast of 22.3k. The 3-month ILO unemployment rate for the period ending March increased slightly to 4.5%, up from 4.4% in the preceding period, in line with estimates.

On the other hand, the average earnings excluding bonuses for the 3 months missed the expectation of 5.7% with a change of 5.6%, while average earnings including bonuses for the period beat the forecast of 5.2% with a change of 5.5%.

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

Technically, the GBP/USD currency pair has completed a downward breakout from an ascending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias as it moves closer to oversold conditions.

Therefore, the bears will look to stretch the current pullback towards 1.3206 or lower to 1.3157. On the other hand, the bulls will look to pounce on rebounds at about 1.3314 or higher at 1.3362.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair trades within a descending channel formation. The 14-day RSI also supports a long-term bearish bias after pulling back to avoid entering overbought conditions.

Therefore, the bears will look to extend the current declines toward 1.3059 or lower to 1.2865. On the other hand, the bulls will look to pounce on rebounds at about 1.3439 or higher at 1.3621.