GBP/USD Forecast — British Pound Could Correct Higher Vs US Dollar

  • - The British Pound found support near 1.3485 after a major decline against the US Dollar.
  • - There was a break above a major bearish trend line with resistance at 1.3540 on the hourly chart of the GBP/USD pair.
  • - Recently in China, the Consumer Price Index for April 2018 was released by the National Bureau of Statistics of China.
  • - The outcome was below the forecast of -0.1% as there was a decline in the CPI by 0.2% in April 2018.

China’s Consumer Price Index

Recently in China, the Consumer Price Index for April 2018 was released by the National Bureau of Statistics of China. The market was positioned for a decline in the CPI by 0.1% compared with the previous month.

The actual was below the forecast of -0.1% as there was a decline in the CPI by 0.2% in April 2018. The yearly change posted a rise of 1.8% in the CPI, which was less than the forecast of +1.9%. Moreover, the Producer Price Index in April 2018 came in at +3.4%, less than the forecast of +3.5% (YoY).

The GBP/USD pair is currently correcting higher and is supported nicely above the 1.3530 level in the near term.

GBP/USD Technical Analysis

The British Pound declined heavily during the past few days and broke the 1.3600 support level against the US Dollar. The GBP/USD pair even traded a few pips below 1.3500 handle and settled below the 100 hourly simple moving average.

GBP/USD Technical Analysis British Pound US Dollar

The pair formed a low at 1.3486 and started correcting higher. It moved higher and traded above the 1.3550 resistance and the 100 hourly SMA. More importantly, there was a break above a major bearish trend line with resistance at 1.3540 on the hourly chart of the GBP/USD pair.

The pair traded as high as 1.3606 and is currently correcting lower. It tested the 61.8% Fib retracement level of the last wave from the 1.3498 low to 1.3606 high. It seems like the pair is well supported above the 1.3530 level and it may move further higher in the near term.

On the upside, a proper close above the 1.3600 resistance may open the doors for more gains in the near term.


Originally published at ForexGator.com.

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