- The GBP/USD pair could extend its upwards movement if the price makes a valid breakout through the 61.8% retracement level.
- The US NFP, Average Hourly Earnings, and the Unemployment Rate data could move the price later.
- A bearish pattern around the 61.8% could announce a new leg down.
The GBP/USD forecast sees the pair maintain a bullish bias after ending its retreat. The rate returned higher after registering a false breakdown below the 1.35 psychological level.
In the short term, a temporary decline was natural and expected. DXY’s retreat helped the GBP to drag the pair higher towards 1.3550 immediate resistance.
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Today, the volatility will be high around the US data, so you should be careful as the GBP/USD pair could register sharp movements in both directions.
Earlier, the UK Construction PMI was reported at 54.3 above 53.9 estimates. Still, the GBP/USD could come back down if the US high-impact indicators report better than expected data later today.
The Non-Farm Employment Change could be reported at 426K in the last months versus 210K in November, the Average Hourly Earnings could register a 0.4% growth, while the Unemployment Rate could drop to 4.1% from 4.2% which could be good for the USD.
From the technical point of view, the currency pair maintains a bullish bias despite a temporary decline. Worse than expected US figures could boost the pair.
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GBP/USD Forecast – Price Technical Analysis: Up Channel
The GBP/USD pair rebounded after registering a false breakdown below the 50% retracement level and below the 1.3500 psychological level. Also, it has managed to stay above the first warning line (WL1) of the former descending pitchfork signaling strong upside pressure.
Now, it challenges the 1.3550 static resistance level, the bias remains bullish as long as it stays above the immediate uptrend line. The price action developed a potential up channel, or a Rising Wedge.
The immediate major upside obstacle is represented by the 61.8% retracement level. Only a valid breakout above this level could announce an upside continuation. Jumping, closing, and stabilizing above it could bring new long opportunities.
On the other hand, making a valid breakdown below the uptrend line could signal that the upwards movement is over. Also, another false breakout above the 61.8% retracement level, or any bearish reversal pattern around this obstacle may announce a new leg down.
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