FX.co ★ GBP/USD: downside seems over, 1.2106 as key level

The GBP/USD pair dropped a little in the short term as the Dollar Index tried to rebound. Now, it is trading at 1.2166 at the time of writing. After its strong growth, a temporary retreat was natural. The instrument could test and retest the immediate downside obstacles before jumping higher.

The price action signaled that the downside movement ended and that the buyers could take the lead. Fundamentally, the UK is to release the CBI Realized Sales and the Public Sector Net Borrowing but I don't think that the indicator will have an impact.

Later today, the Canadian inflation figures could have a big impact on the USD as well. Also, the US CB Consumer Confidence could increase from 100.2 to 101.0. This is seen as a high-impact event as well.

GBP/USD Retests Sellers!

Technically, the rate dropped but it has failed to take out the 1.2133 - 1.2106 zone. Now, it has come back above the descending pitchfork's median line (ml). So, the median line and the demand zone represent downside obstacles.

Testing and retesting these levels could announce a new bullish momentum. New false breakdowns could signal exhausted sellers and strong buyers.

GBP/USD Forecast!

As long as it stays above 1.2133 and above the median line (ml), the GBP/USD pair could develop a new bullish momentum. Testing and retesting, registering false breakdowns could bring a new long opportunity.