FX: GBP/USD: downside continuation signaled

Thursday's Bank's of England decision may be record-breaking!

Relevance up to 15:00 2022-06-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

The GBP/USD pair dropped as the Dollar Index rallied in the short term. It was trading at 1.2166 at the time of writing above 1.2141 today's low. The currency pair tries to come back higher as the DXY reached a resistance level. Only DXY's further growth should push the GBP/USD lower.

Fundamentally, the US data came in mixed earlier. The Final GDP registered a 1.6% drop versus the 1.5% expected, while the Final GDP Price Index rose by 8.2% exceeding the 8.1% estimates. Also, don't forget that Fed Chair Powell and BOE Gov Bailey's speeches could bring more volatility and sharp movements.

GBP/USD Validates Its Breakdown!

 

Exchange Rates 29.06.2022 analysis

 

Technically, the GBP/USD pair was trapped between the 1.2324 and 1.2165 levels. Its failure to make a new higher high signaled a downside breakout from this range. As you can see on the H1 chart, the rate dropped below this downside obstacle and now it tries to retest this key level.

Personally, I've drawn a minor downtrend line. As long as it stays under this line, the GBP/USD pair could drop deeper.

GBP/USD Outlook!

The valid breakdown below 1.2208 signaled a potential breakdown below the 1.2165 critical support as well. The current 1.2165 retests could announce more declines. A false breakout above this level and a new lower low, a bearish closure below 1.2141 could open the door for a larger drop and could bring new short opportunities with a potential downside target at 1.2100.

 

Read more: https://www.instaforex.eu/forex_analysis/282501

Thursday's Bank's of England decision may be record-breaking!

InstaForex Analysis

Instant Trading EU Ltd. is the CFD broker operating under the brand instaforex.eu, regulated by CySec with license number 266/15.

Besides CySEC, Instant Trading EU Ltd. is also supervised by the Czech National Bank (CNB), the Slovak National Bank (SNB), and the Polish Financial Supervision Authority (KNF). InstaForex.eu has branches in the Czech Republic, Slovakia, and Poland, where it provides support in local languages. InstaForex.eu is a member of the Investor Compensation Fund (I.C.F) which is an additional security for the client's funds.

InstaForex.eu offers access to around 2,500 instruments (CFDs in Stocks, ETFs, Indices, Commodities, Forex, Cryptocurrencies, US Synthetic Stocks) and the MT4 and MT5 platforms,trading accounts in EUR, USD, PLN, CZK, GBP.

More information at: www.instaforex.eu

 

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.44%. of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.