The GBPUSD is forming a new downtrend, despite the fact that the pound, bolstered by robust economic data in the U.K., continues to show resilience to the mounting bearish pressure. That is why other currency pairs involving the greenback have already dived more than the cable has, but even the GBPUSD is starting to be affected by changing market sentiment more noticeably.
Rising global prices are likely to stave off the rally of the energy market because of higher costs to production, despite the steady global recovery. Therefore, the demand for the dollar is only likely to continue growing in the foreseeable future, parallel to the rising bond yields in the U.S.
The underlying fundamentals seem to be favouring the continuation of GBPUSD's downtrend development, despite a recent bullish correction. That is why today's analysis is examining the current trend-continuation setup.
As can be seen on the daily chart below, the emergence of a new downtrend represents a breakout from the existing regression trend. After breaking down below the channel's lower boundary, the price action established a minor bullish pullback to the same boundary (from below), which climaxed yesterday. It left behind a Shooting Star candle, which substantiates the expectations for continued price depreciation.
|Short Term||Long Term||Net % Gains|
|144 PIPS||46 PIPS||Pending||Pending||
|144 PIPS||46 PIPS|
|Net % Gains|
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