GBP/USD Forecast: Bears maintain the pressure, lower lows at sight

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3801

The UK Q2 Gross Domestic Product met expectations by printing 4.8%.
Industrial Production in the UK advanced at a slower than anticipated pace.
GBP/USD approaches 1.3800 and could break below the level.

The GBP/USD pair edged lower on Thursday, falling to 1.3794, its lowest for the month. The greenback strengthened in the American afternoon, following upbeat employment data coupled with a fresh sign of heating inflation, as the PPI surpassed expectations in July.

Earlier in the day, the UK released a batch of mixed data. The preliminary estimate of the Q2 Gross Domestic Product printed 4.8%, as expected, and improved from -1.6% in the previous quarter. Industrial Production was up 8.3% YoY in June while Manufacturing Production was up 13.9% in the same period. The Goods Trade Balance posted a deficit of £-11.988 billion, more than doubling the previous figure and worse than anticipated. The UK won’t publish relevant macroeconomic data on Friday.

GBP/USD short-term technical outlook

From a technical point of view, the GBP/USD pair is poised to extend its slump. The 4-hour chart shows that it has fallen below all of its moving averages, which remain confined to a tight 20 pips range, although with the shorter one gaining bearish strength. Also, technical indicators turned lower, maintaining their bearish momentum within negative levels. Additional declines are likely once the pair breaks below 1.3790, the immediate support level.

Support levels: 1.3790 1.3755 1.3710

Resistance levels: 1.3865 1.3910 1.3960

View Live Chart for the GBP/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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