GBP/USD Forecast: descending trend-channel formation points to additional weakness
|The GBP/USD pair had a good two-way move on Thursday, initially dropped to a 6-day low following the release of disappointing fourth-quarter UK GDP growth figures but then rallied over 130-pips amid some renewed US Dollar selling pressure. The momentum, however, ran out of steam out ahead of the key 1.40 psychological mark, which might continue to cap any near-term upside for the major.
There aren't any major market-moving economic releases due, either from the UK or the US and hence, traders are likely to take cues from central bank speeches. The BOE Deputy Governor David Ramsden is due to speak at a conference in Cambridge and might drive sentiment around the British Pound later during the mid-European session. Later in the day, comments by New York Fed President William Dudley would influence the USD price dynamics and should also provide some short-term momentum play on the last trading day of the week.
Technically, the pair has been trending lower within a short-term descending trend-channel and might continue to confront some fresh supply at the channel resistance, currently near the 1.3965-70 region. A convincing breakthrough would negate the bearish channel and trigger a short-covering move, beyond the 1.40 handle, towards its next resistance near mid-1.4000s.
Alternatively, retracement from the trend-channel resistance could get extended towards the 1.3915-10 immediate support, below which the pair seems more likely to head back towards retesting the channel support, currently near the 1.3835 region.
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