GBP/USD Forecast — British Pound Correcting Lower Vs US Dollar
- - The British Pound started a downside move after trading as high as 1.3540 against the US Dollar.
- - There is a major expanding triangle forming with resistance near 1.3490 on the hourly chart of the GBP/USD pair.
- - Recently in the US, the ISM Non-Manufacturing Index for Nov 2017 was released by the Institute for Supply Management (ISM).
- - The outcome was below the forecast of 59.0 as there was a decline in index from 60.1 to 57.4.
US ISM Non-Manufacturing Index
Recently in the US, the ISM Non-Manufacturing Index for Nov 2017 was released by the Institute for Supply Management (ISM). The market was positioned for a decline in the index from the last reading of 60.1 to 59.0 in Nov 2017.
The actual result was below the forecast of 59.0 as there was a decline in index from 60.1 to 57.4. Moreover, the Non-Manufacturing Business Activity Index was down by 0.8% to 61.4% from the October reading of 62.2%. The report added that:
The New Orders Index registered 58.7 percent, 4.1 percentage points lower than the reading of 62.8 percent in October. The Employment Index decreased 2.2 percentage points in November to 55.3 percent from the October reading of 57.5 percent.
Overall, the result was mixed, but failed to help GBP/USD, and the pair might continue to decline towards 1.3350 in the near term.
GBP/USD Technical Analysis
The British Pound had a good bullish run above the 1.3400 handle against the US Dollar. The GBP/USD pair popped higher and broke a few important resistance levels such as 1.3480, 1.3500 and the 100 hourly simple moving average.
The pair traded as high as 1.3548 and later a downside correction was initiated. It is slowly moving lower and already broke the 1.3500 and 1.3480 support levels. It also cleared the 100 hourly SMA and the 1.3450 pivot area.
It seems like the pair is following a major expanding triangle with resistance near 1.3490 on the hourly chart. An initial resistance on the upside is around the 1.3475 level and the 100 hourly SMA. It also coincides with the 61.8 % Fib retracement level of the last decline from the 1.3538 high to 1.3370 low.
Overall, the GBP/USD pair is under pressure in the short term and it could even break the 1.3400 handle.
Originally published at — ForexGator.com.