The GBP/USD is on a declining path, the price has started a broader bearish movement which has taken out very important support levels. The pair has decreased because the Cable was very weak in the last year. The Pound has rebounded on the short term, but the buyers weren’t able to push the price higher because the Cable is under selling pressure ahead the ‘’Brexit’’ referendum, the UK could leave the European Union this summer and could produce a hurricane on the international financial markets.
The price is trading right below the 1.4227 support level, the price has decreased sharply last week and have failed to continue the short term rebound, the bears have taken control again and could drive the price toward the previous lows again, you can notice that the price has found strong support somewhere at 1.3834. The GBP/USD remains under massive selling pressure as long as is trading inside of the descending pitchfork, is decreasing along the median line (ML) of this pitchfork and is trapped much below the upper median line (UML) of this pitchfork. The currency pair has decreased on Friday right after the US data were published, the USD was boosted by the higher Non-Farm Employment Change, the United States have added 215K jobs in March, exceeding the 206K estimate. The ISM Manufacturing PMI has increased from 49.5 to 51.8 points, signalling that the manufacturing sector has expanded again in March after 4-month’s contraction.
The greenback was punished by the US Unemployment Rate, which has increased unexpectedly from 4.9% to 5.0% in March, has surged again after 3-months.
The price is moving down between the 50% Fibonacci line (descending dotted line from above the median line) and the 25% Fibonacci line, the price has retested the 50% Fibonacci line but wasn’t able to close above this major obstacle, the pair is going toward the median line (ML) of the descending pitchfork, where he could find temporary support again. I’ve drawn a short term pitchfork to show you better the price movement, the price is trading between the lower median line (lml) and the median line (ml), the USD bulls are dragging the price toward the lower median line (lml), this bearish momentum was expected because the price has failed to retest the median line (ml) again, has close also below the 50% Fibonacci line.
The US dollar is struggling to rebound and top recover after the lasted declines, the USDX is moving sideways on the lower timeframes, but the rate could increase on the short term and could help the USD to appreciate versus its counterparts.
The price is moving somehow sideways on the H4 chart, has increased a little and has challenged the 1.4227 level and now looks determined to go down with a target at the lower median line (lml) or lower on the median line (ML) of the medium term descending pitchfork. Further declines are expected as long as the price stays below the 50% Fibonacci line, could become strongly bearish if will escape from the short term ascending pitchfork.