- The FOMC Meeting Minutes and the US retail sales could bring high volatility today.
- Taking out the resistance levels could announce a larger growth.
- False breakouts through the upper median line (UML) may announce a new sell-off.
The GBP/USD price was trading in the red at 1.2082 at the time of writing. Technically, the price remains sideways in the short term. That’s why we must wait for fresh impetus to find decent trading opportunities.
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Today, the price is driven by fundamentals, so discussing a clear direction is premature. The currency pair rebounded yesterday as the Dollar Index plunged. Now, the DXY rallied, boosting the greenback.
Still, the DXY stands below intense upside obstacles. An upside continuation is far from being confirmed. A new sell-off registered by the Dollar Index could weaken the USD.
As you already know, the UK and the US data came in mixed yesterday. Today, the UK CPI reported a 10.1% growth in July versus 9.8% expected, compared to 9.4% growth in June, while the Core CPI registered a 6.2% growth exceeding the 5.9% growth forecasted and the 5.8% growth registered in the previous reporting period. In addition, the RPI and RPI Output came in better than expected.
Later, the US data could bring high volatility and sharp movements. The Retail Sales are expected to report a 0.1% growth while the Core Retail Sales may register a 0.1% drop. Also, the FOMC Meeting Minutes report is seen as high-impact, so the volatility could be high around this event.
GBP/USD price technical analysis: Selling bias
The GBP/USD pair plunged after retesting the broken ascending trendline. However, it has failed to reach the former low of 1.2002, signaling exhausted sellers and strong buyers. It almost reached the descending pitchfork’s upper median line (UML), which is a potential dynamic resistance.
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Also, the weekly pivot point of 1.2150 represents a stiff resistance. Taking out these resistance levels could activate a more significant growth. On the other hand, testing and retesting these levels and registering only false breakouts could announce a new sell-off in the short term. Still, a more considerable drop could be activated only after a valid breakdown below the 1.2002 critical support level.
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