GBPUSD Analysis: There is One Formidable Pattern

Core retail sales in the US weakened the USD as the values were lower than the previous and lower than expected. Core retails sales from the UK will be announced tomorrow and the forecasts say that the British Pound might be in danger.

The Pound looks strong and is looking to break the resistance and climb higher, though there are resistances and patterns that signal a correction.

First and the foremost is the dynamic resistance (upper threshold of the ascending channel) on a 4H chart. The pair penetrated the resistance and was sent back yesterday. The pattern on the same 4H is “double top” which in general signals a bearish move.

In the bigger picture, we have witnessed the closing price of November 11 and November 18 bear a strong resistance, and highs of the aforesaid candles also are at Fibonacci 0.786 level. Only closing above that level will confirm the further bullish run.

By the time of writing this article GBP/USD quote on Overbit is 1.32340, which is above the dynamic support, though is below EMA20. The MACD line is already below the signal line, hence might be confirmation of a correction, though the best would be to wait for the pair to break the dynamic support.

If the breakout is confirmed, the pair will drop towards 1.31430 and below that to 1.30648. Continuation of the correction might be backed by strong US Jobless Claims data today and weak UK Retail Sales data tomorrow.