GBP/USD price finds no respite, sitting at 1.16 as USD bulls intensify

  • The GBP/USD pair maintains a bearish bias as long as it remains below the middle line (ml).
  • The S2 is seen as a significant downside target.
  • Its false break above the former high confirmed the end of the rebound.

GBP/USD price crashed after failing to recover modest ground. It was trading at 1.1665 at the time of writing. He seems quite rushed by the bears.

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The USD took the lead and dragged the price lower as the Dollar Index ended its minor correction after hitting new highs. Today UK banks will be closed. Only FOMC member Brainard could bring GBP/USD to life.

Tomorrow, M4 money supply, mortgage approvals and net retail lending could provide some action. Still, JOLTS job openings in the US and CB consumer confidence data could be decisive as the indicators have a high impact.

Dollar Index Price Technical Analysis: Key Resistance at 109.29

The Dollar Index fell slightly after its strong growth. The short-lived decline was natural before extending its bullish move. It remains bullish as the Federal Reserve is expected to continue raising rates. A rise of 50 basis points is expected in September. This is why the index is strongly bullish.

As you can see on the hourly chart, the DXY has found support at the midline of the ascending fork (ml), which is now challenging the static resistance at 109.29. A valid breakout can confirm further growth. This scenario could help us catch new USD buyers.

GBP/USD Price Technical Analysis: No Rest for the Bulls

GBP/USD only recorded a false break above 1.1877, signaling a counterfeit and triggering a fresh sell-off. Now it has ignored the middle line (ml) and the downside hurdles at 1.1716, confirming further decline.

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After its massive fall, the likelihood of a temporary rebound cannot be ruled out. Price may come back to test the psychological level of 1.1700 and the middle line (ml) before extending its decline.

The weekly S1 (1.1670) represented a potential downside target. A stabilization below this level could activate more declines towards the weekly S2 (1.1600). Moreover, as long as it remains below the middle line (ml), the GBP/USD pair could also approach and reach the lower middle line (LML).

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