FX.co ★ GBP/USD: valid breakout signals more gains

The GBP/USD pair is trading in the red as the DXY's rebound lifted the USD. Still, as you already know from my analyses, the Dollar Index is in a corrective phase, so the bias remains bearish in the short term. Technically, the currency pair reached strong resistance, a valid breakout may signal further growth.

Fundamentally, the US data came in mixed today. The Core PCE Price Index rose by 0.3% matching expectations, Revised UoM Consumer Sentiment came in at 58.4 points below 59.1 expected, while the Goods Trade Balance came in better than expected at -105.9B versus -114.8B estimates. Personal Spending rose by 0.9% beating the 0.7% estimates, while Personal Income registered only a 0.4% growth versus the 0.5% forecasted.

GBP/USD At Resistance!

As you can see on the H4 chart, the GBP/USD pair jumped above the warning line (wl1) and above the 1.2614 - 1.2638 area but it has failed to stay above these upside obstacles. Still, the current retreat could be only a temporary one. It could still resume its growth as long as it stays above the 1.2585 immediate support.

In the short term, the GBP/USD pair could try again to take out the resistance levels. The bullish pressure remains high after testing and retesting the 1.2498 level and the upper median line (uml).

GBP/USD Outlook!

Jumping and stabilizing above 1.2638 could confirm an upside continuation. A valid breakout and a new higher high could bring new long opportunities.

On the other hand, dropping and closing below 1.2585 may signal a potential drop towards the upper median line (uml).