The currency pair rebounded in the short term as the Dollar Index retreated. After its massive drop, the GBP/USD pair was expected to come back to test and retest the near-term resistance levels before going down.
Fundamentally, the UK BRC Shop Price Index reported a 6.9% growth compared to the 7.6% growth estimated. Later, the US S&P/CS Composite-20 HPI is expected to report a 1.5% drop, CB Consumer Confidence may drop to 116.0, while JOLTS Job Openings could be reported at 9.49M. Better-than-expected US figures should lift the greenback.
GBP/USD Temporary Rebound!
From the technical point of view, the rate came back to retest the range's broken support of 1.2620 and the downtrend line.
As you can see, the GBP/USD pair registered only false breakouts through the immediate obstacles, signaling a new sell-off. As long as it stays below the downtrend line, the price could extend its sell-off.
GBP/USD Outlook!The first downside target and obstacle is represented by the warning line (wl1). Dropping and closing below it activates a larger drop and is seen as a new selling signal. The S1 (1.2480) and the channel's downside line represent downside targets.