23.03.2023 07:39 PM
GBP/USD: rising wedge in progress

The GBP/USD pair registered a strong leg higher in the short term and now is trading at 1.2314 at the time of writing. Now, it stands right below important upside obstacles. After its amazing rally, we cannot exclude a temporary drop. Still, the DXY remains under downside pressure after the FOMC.

Today, the BOE increased the Federal Funds Rate by 25 bps as expected. On the other hand, the US Current Account and Unemployment Claims came in better than expected, while New Home Sales came in worse than expected.

Tomorrow, the UK Flash Services PMI is expected at 53.1 points versus 53.5 points expected, while Flash Manufacturing PMI could increase from 49.3 to 49.8 points. On the other hand, the US Flash Manufacturing PMI could remain in the contraction territory at 47.0, while Flash Services PMI is expected at 50.3 points below 50.6 points in the previous reporting period.

GBP/USD Potential Range!

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Technically, the price action developed a potential Rising Wedge formation which is seen as a downside reversal pattern. The rate tested and retested the upside line and the R2 (1.2320) and registered only false breakouts.

The uptrend line, 1.2260, and the weekly R1 (1.2250) represent downside obstacles and targets.

GBP/USD Forecast!

A valid breakout above 1.2343 activates further growth. This is seen as a buying signal.

Taking out the uptrend line and making a new lower low activates a downside movement. Confirming the Rising Wedge pattern should bring good short opportunities.

Ralph Shedler,
Analytical expert of InstaForex
© 2007-2023
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