The GBP/USD has decreased in the Asian session and could continue to drop because the price looks too heavy to stay higher, the US dollar index is pushing the greenback higher again after a short retreat in the Friday’s trading session. The currency pair has failed to retest the previous highs and now is challenging an important dynamic support.

The Pound continues to trade lower versus the greenback as the Bank of England has maintained the Official Bank Rate on hold, at 0.50%, the MPC members have voted unanimously for this decision. The GBP/USD has increased on Friday because the USD was punished by poor economic data, the inflation data has come worse than was expected, the CPI rose only by 0.1%, less than the 0.2% estimate. The Core CPI has increased by 0.1% and has disappointed a little as the estimate was 0.2%. The US dollar has increased somehow surprisingly in the last week as the Retail Sales have decreased sharply in March.

The US poor economic data have punished the greenback on Friday, the Prelim UoM Consumer Sentiment has decreased from 91.0 to 89.7 even if the estimate was 91.9 points. The Capacity Utilization has dropped from 76.7% to 74.8% in March, the economic indicator has decreased much more compared to the 75.4% forecast, the capacity utilization has reached the lowest level after November 2010. The United States Industrial Production has plunged in March by 0.6%, much more compared to the -0.1% estimate.

GBPUSDD

The price has decreased again below the lower median line of the short ascending pitchfork and now is approaching the sliding parallel line, where he could find temporary support. The GBP/USD is expected to fall again toward the median line (ML) of the medium term descending pitchfork, the price could fall along this line or could become strongly bearish if will manage to close and stabilize below this line. You can see that the price has failed to retest the 50% Fibonacci line, so the current decrease was expected, personally I’ll wait till the price will break below the 1.4077 horizontal resistance to be sure that the bearish movement will continue.

GBPUSDH

The pair is moving somehow sideways on the short term, the price is approaching the support of this consolidation and could fall even deeper if the US dollar index will have enough energy to increase further. We could have another leg higher only if the price will jump and consolidate above the 1.4227 and above the lower median line (lml) of the ascending pitchfork.

The price is driven by the technical factors today because we don’t have high impact economic data on the economic calendar.

GBPUSDHH

The price could retest the lower median line (LML) again before will resume the bearish momentum, the perspective remains bearish on the H1 chart as long as the is trading below the UML and below the upper median line of the short descending pitchfork, the next downside target is at the sliding parallel line.

 

4 thoughts on “GBP/USD under bearish pressure April 18, 2016”

  1. Ryan Gandalf van Jaarsveld says:

    Thanks Olimpiu! Interesting that we have not seen a negative reaction to yesterday’s Doha meeting – seems to have been a risk on London session with a weak dollar. GBPUSD moved up from DS1 this morning, hit 61.8 fib on H1 and is now braiding the DPP. Keen to see how the US session reacts to the outcome of yesterday’s meeting – if the US reacts negatively then that would mean oil down and dollar down, if I am correct?

  2. Jim Reddihough says:

    Thanks. Looks like we will have to wait till Tuesday before it turns down again. Still a bit shy of resistance at 1.43 area.

  3. Jim Reddihough says:

    Another day passed and no reversal. Maybe it’s going all the way to 1.45?

    1. Olimpiu Tuns - FOREX.TODAY says:

      Yes Jim, the GBP/USD has jumped above 50% Fibonacci line from my analysis, has retreatd yesterday, but most likley will increase further and will approach the 1.45 area.

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