GBPUSD: Falling wedge teases buyers ahead of UK/US data
The GBPUSD currency pair is currently at its lowest point in over a week as traders wait for important data releases on Wednesday. This data includes the UK’s S&P Global/CIPS PMIs for August and the US Factory Orders and JOLTS Job Openings for July. The Pound Sterling has recently broken below a key support level comprising a one-month-old ascending trend line, which has now become resistant.
Bullish technical formation, bumpy road to south challenge GBPUSD bears
Despite the recent decline, the GBPUSD pair is holding up well due to a bullish pattern known as a falling wedge and several support levels. The MACD indicator also shows a decreasing bearish trend, which could help GBP/USD buyers. Additionally, the RSI indicator suggests there isn’t strong market support for the current downtrend.
Technical levels to watch
While the short-term falling wedge restricts the GBPUSD pair’s immediate moves between 1.3080 and 1.3120, the support-turned-resistance line from early August and a seven-week-long horizontal region act as additional trading filters around 1.3150 and 1.3050-35 respectively.
Apart from that, the 50-SMA and 200-SMA could challenge the momentum traders around 1.3170 and 1.2935 in that order.
In a case where the GBPUSD pair remains firmer past 1.3170, it will refresh the yearly high while aiming for the falling wedge confirmation’s theoretical target surrounding 1.3300.
Alternatively, a downside break of the 200-SMA support of 1.2935 will make the Cable pair vulnerable to slump toward mid-August swing low near 1.2800.
Looking forward…
In the short term, GBPUSD might continue to trend lower, but the bears are losing momentum. Any disappointment in US data could quickly bring buyers back into the market, especially given the bullish technical indicators.
