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GBP/USD: Weekly Bearish Reversal

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by , 07-24-2018 at 09:20 AM (856 Views)
      
   
The latter-portion of last week saw a strong bounce develop in GBP/USD, and this came after the pair tested below a key psychological level for the first time since last September. As we wrote earlier during the week, the down-trend in the British Pound was very much in-focus as we approached a read of inflation out of the UK for the month of June. Markets were looking for inflation to perk-up to 2.6% after two consecutive months at 2.4%, but the actual print gave us a third straight month at 2.4% to further muddy the water for the Bank of England.

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Inflation strength is no longer as prominent, and in the wake of last week’s inflation report, prices dipped below the 1.3000 level for the first time since last year. But – as we wrote shortly after, GBP/USD was still very oversold. We looked for two areas of potential resistance may that could’ve opened the door for bearish strategies. But – no resistance showed at either, and prices are now finding a bit of support on the zone that we were looking at that runs from 1.3083-1.3100.

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