GBP/USD Deeper Drop Expected!|KOL Analysis•Olimpiu Tuns

The pair has changed little in the early morning but it could accelerate its sell-off in the coming hours. USDXs rally boosted the greenback which has appreciated versus most of its rivals.

GBP/USD is traded at 1.2818, above 1.2763 former low. A new lower low validates a deeper drop. Technically, the pair is still expected to resume its corrective phase, the most recent rebound helped us to go short again.

A USDX‘s further growth and stabilization above 93.81 could signal reversal, so the USD should continue its appreciation versus its rivals if this scenario takes shape. You should be careful as the BOE Gov Bailey’s speech and Powells testifies could bring life on this pair later.

Also, the US Existing Home Sales are expected to increase from 5.86M to 6.05M, while the Richmond Manufacturing Index may drop to 12 points, from 18 in the former reading period. The UK‘s CBI Industrial Production could increase a little from -44 to -32 but I don’t believe that the Pound will recover based on this indicator.

● GBP/USD On The Way Down!

GBP/USD has rebounded in the short term but the failure to reach and retest the median line (ML) and the 78.6% level signals strong selling pressure. Ive told you in my latest analyses that the pair should continue to drop if it stays below the median line (ML).

Another lower low and a drop below the 61.8% (1.2712) could bring a fresh short opportunity, bearish signal. Ive drawn a minor downtrend line, so the bias will be bearish as long it stays below it.

The 50% Fibonacci line (ascending dotted line) and the 50% (1.2463) retracement level could be used as potential downside targets. The bearish scenario could be invalidated if GBP/USD fails to make another lower low and if it jump above the downtrend line.

● USD/JPY Double Bottom？

USD/JPY dropped like a rock in the short term, but the decline seems finished. It has retested the median line (ML) of the descending pitchfork and it has closed above 104.18 static support.

Yesterdays retest and bullish closure far above the median line (ML) signals a potential rebound. Still, the pair could drop to test and retest 104.18 before jumping higher. It could move in range between 104.18 and 107.06 levels in the upcoming weeks.

The selling pressure remains high despite yesterdays rebound. The failiure to reach and retest the upper median line (UML) in the last attempts sinaled a further drop towrds new lows.

Thats why only a valid breakout above the upper median line (UML) suggests reversa and a larger upside movement. Another lower low, drop below 104.00 psychological level validates more declines.

The Japanese Yen could depreciate versus the greenback if JP225 and the USDX will jump higher in the upcoming period. The potential double bottom pattern could validated by a bullish cadle today or by another false breakdown below 104.18 level.

{About the Author}

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group, and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Trader / Trainer / Portfolio Manager.

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