GBP/USD Pulls Back to Reject a Retest of Weekly Highs Above 1.2100

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The GBP/USD currency pair pulled back on Tuesday to reject a retest of the current weekly highs above 1.2100. The pair ended the session at around 1.2060, which is the median point of this week’s high and low.

The GBP/USD has been trading in a consolidative triangular pattern since the start of the week and this looks set to continue over the next few days as it approaches a breakout point.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading at the back of the US Consumer Price Index data which on Tuesday beat expectations of 1.7% (YoY) growth for July with 1.8% growth. Other variations of the Index also beat expectations including ex-Food & Energy, and the Core CPI.

ON Wednesday, traders will be looking forward to the UK CPI scheduled to come out at around 08:30 GMT. The DCLG House Price Index will also be out around the same time followed by the Producer Price Index and the Consumer Price Index.

Later in the day, the US will also release the Export Price Index and the Import Price Index data for the (YoY) and (MoM) changes.

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

From a technical perspective, the GBP/USD currency pair appears to be trading in a converging triangle pattern, which indicates short-term consolidation. 

The Relative Strength Index indicator in the 60-min chart shows that the pair is still pegged within the normal trading zone, which indicates that it might be a few days before a breakout happens.

Therefore, the bulls will be looking for the next rebound by targeting profits at around 1.2080 or higher at 1.2100 key level. On the other hand, the bears will look to pounce by targeting profits at around 1.2043 or lower at 1.2018.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair appears to be experiencing extreme bearish pressure, which supports a bearish breakout should the pair break from the short-term consolidative pattern.

Therefore, the bulls will have limited opportunities above. However, they could still target long-term profits in the hope of a rebound at around 1.2121 or high at 1.2237. On the other hand, the bears will be more optimistic going into mid-week. They will target long-term profits at around 1.2010 or lower at 1.2000.

In summary, the GBP/USD currency pair appears to be trading in a short-term triangular consolidative pattern, but in the long-term, the bears appear to be still holding control.

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