GBP/USD rebounded but this could be only a temporary one. It's trading in the green at the 1.3832 level. The pair has shown some overbought signs, so we cannot exclude a potential downside movement.
Fundamentally, the United Kingdom inflation data have come in better than expected. Still, unexpected growth in inflation is not necessarily good for the economy and for the Pound. The CPI rose by 3.2% more versus 2.9% expected and compared to 2.0%in the previous reporting period. In addition, the Core CPI registered a 3.1% growth even if the specialists have expected only a 2.9% growth.
GBP/USD seems undecided in the short term, but I believe that the US retail sales data could bring a clear direction tomorrow.
GBP/USD escaped from the ascending pitchfork's body signaling exhausted buyers. It has found strong resistance at the 78.6% retracement level. The major bearish engulfing printed yesterday and confirmed by a strong bearish candle signaled that the upside movement is over.
The outside sliding line (SL1) is seen as a dynamic support. Dropping and stabilizing below it may bring new short opportunities.
GBP/USD may bring a new short opportunity if it drops below 1.3792 today's low, if it makes a new lower low. The 38.2% and 23.6% levels are seen as potential downside targets.