1.2800 Calling? GBP/USD Breaks Key Support
Yesterday's UK inflation report revealed a cooler-than-expected CPI print of 1.7%, the lowest since April 2021. This dip was largely fueled by falling transport costs, echoing the recent decline in oil prices (With Brent crude slipping below $70 a barrel from September's highs of $77).
The GBP/USD pair has broken below the key 1.30 support level. This opens the door for a potential slide to 1.2800 in the medium term.
Adding to the bearish pressure, upcoming retail sales data could further weigh on the pair. Expectations are for a 0.3% rise in US retail sales, contrasting with a -0.3% dip in the UK. Such a divergence would likely intensify selling pressure on GBP/USD.
Technical analysis reinforces this bearish outlook. Fibonacci retracement levels from the mid-April to end-of-September rally (38%, 50%, and 61%) highlight key support and resistance zones. The 50% and 61% levels converge near 1.2800, making this a critical area to watch.
Based on this confluence of factors, the initial downside target for GBP/USD is set at 1.2860 (50% Fib). Traders holding short positions should keep a close eye on upcoming retail sales data for further confirmation.
Support: 1.2860, 1.2800
Resistance: 1.3000 - 1.3100
While maintaining a bearish bias, I'll be actively seeking short entries on lower timeframes (4h or 1h) using price action triggers. These opportunities will likely align with positive US or negative UK economic data. However, a potential retracement towards 1.30-1.31 could offer additional shorting opportunities before the anticipated further decline.
The GBP/USD pair has broken below the key 1.30 support level. This opens the door for a potential slide to 1.2800 in the medium term.
Adding to the bearish pressure, upcoming retail sales data could further weigh on the pair. Expectations are for a 0.3% rise in US retail sales, contrasting with a -0.3% dip in the UK. Such a divergence would likely intensify selling pressure on GBP/USD.
Technical analysis reinforces this bearish outlook. Fibonacci retracement levels from the mid-April to end-of-September rally (38%, 50%, and 61%) highlight key support and resistance zones. The 50% and 61% levels converge near 1.2800, making this a critical area to watch.
Based on this confluence of factors, the initial downside target for GBP/USD is set at 1.2860 (50% Fib). Traders holding short positions should keep a close eye on upcoming retail sales data for further confirmation.
Support: 1.2860, 1.2800
Resistance: 1.3000 - 1.3100
While maintaining a bearish bias, I'll be actively seeking short entries on lower timeframes (4h or 1h) using price action triggers. These opportunities will likely align with positive US or negative UK economic data. However, a potential retracement towards 1.30-1.31 could offer additional shorting opportunities before the anticipated further decline.
Komentar
Interestingly, most traders are bullish on GBPUSD right now. I often like to trade against the crowd in the short term, which further supports my bearish bias.
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