The price action of the GBPUSD pair is establishing a new bearish reversal following yesterday's test of the lower boundary of the ascending channel. The latter is currently serving as a support-turned-resistance. The temporary pullback from yesterday was prompted by the August CPI numbers in the U.S.
The market has already priced in these inflation numbers, which is why the price action is ready to resume heading lower. Before the downtrend can resume heading lower, however, the price action may continue to consolidate around the 23.6 per cent Fibonacci retracement level at 1.3839 and the 38.2 per cent Fibonacci at 1.3794 in the immediate future. This is bolstered by the fact that the former is about to be crossed by the 50-day MA (in green), whereas the latter is converging with the 100-day MA (in blue).
Once the currently developing minor pullback to the upper limit of this consolidation range is completed, the price action would be ready to resume falling towards the 61.8 per cent Fibonacci at 1.3720.
The market has already priced in these inflation numbers, which is why the price action is ready to resume heading lower. Before the downtrend can resume heading lower, however, the price action may continue to consolidate around the 23.6 per cent Fibonacci retracement level at 1.3839 and the 38.2 per cent Fibonacci at 1.3794 in the immediate future. This is bolstered by the fact that the former is about to be crossed by the 50-day MA (in green), whereas the latter is converging with the 100-day MA (in blue).
Once the currently developing minor pullback to the upper limit of this consolidation range is completed, the price action would be ready to resume falling towards the 61.8 per cent Fibonacci at 1.3720.
