FX.co ★ GBP/USD: larger drop confirmed

The GBP/USD pair is trading in the red at 1.2644 at the time of writing. The selling pressure is high, so more declines are expected. You knew from my previous analysis that the currency pair could develop a larger downside movement. It has ended the minor rebound and now it has accelerated the sell-off as the Dollar Index edged higher.

The USD rallied as the US indicators came in better than expected yesterday. Today, the US Goods Trade Balance came in at -91.1B versus -93.3B expected and compared to -97.1B in the previous expected. The Prelim Wholesale Inventories came in as expected. Later, the Fed Chair Powell Speaks could have a big impact.

GBP/USD Massive Drop!

Technically, the GBP/USD pair failed to stay above the weekly pivot point of 1.2750 signaling exhausted buyers and strong downside pressure. Now, it has ignored 1.2691 and the weekly S1 (1.2650) which represented downside obstacles.

After the massive sell-off, we cannot exclude a temporary rebound. The GBP/USD pair could try to test and retest the broken levels before extending its sell-off.

GBP/USD Outlook!

The breakdown below 1.2691 was seen as a new selling signal. Validating the breakdown below the S1 (1.2650) could bring new selling opportunities. The median line (ML) of the descending pitchfork represents a potential downside target.