The GBP/USD pair is dropping like a rock in the short term as the Dollar Index has jumped toward new highs. The instrument is trading at 1.1653 at the time of writing and it seems very heavy. DXY's further growth should force the USD to dominate the currency market.
Today, the UK banks will be closed in observance of the Summer Bank Holiday. Fundamentally, Powel's speech at the Jackson Hole Symposium enabled the greenback to take the lead versus all its rivals. Later, Brainard's remarks could bring more action to the GBP/USD pair.
Tomorrow, the US CB Consumer Confidence and the JOLTS Job Openings are anticipated as high-impact events.
GBP/USD heading towards new lowsThe GBP/USD pair registered a strong sell-off after registering only a false breakout with great separation above the 1.1878 - 1.1889 area. Breaking below the uptrend line and making a new lower low signaled more declines.
It has ignored the 1.1759 and 1.1716 levels which represented strong downside obstacles. After its massive drop, we cannot exclude a temporary rebound.
GBP/USD forecastA temporary rebound could bring new selling opportunities. Coming back to test and retest the 1.17 psychological level and the 1.1716 key resistance, registering only false breakouts could announce more declines and could bring new short opportunities.
Also, stabilizing below the S1 (1.1670) may signal a further drop towards the S2 (1.16).