The British pound currency has continued to fall against the US dollar as the greenback rallies broadly on the currency market due to the notion that Fed members are turning more hawkish on rates.
On the back of this, US Treasury bond yields begin to reflect higher rates, with investors lifting US Treasury bond yields, with the 10-year well above the 4 percent threshold.
Sterling traders also digest comments from the Bank of England’s Chief economist and await PMI data from both the United States and the United Kingdom later today.
For some time now the GBPUSD pair has been trapped in a short-term range of 1.1900 to 1.2100, with the price action looking increasingly bearish on upside attempts.
It can also be said that short-term picture depicts a range of 1.1800 to 1.2400. The risk would be for sterling to break its established range and breaking much lower if 1.1800 cracks soon.
Looking at sentiment data and how traders feel about sterling, the ActivTrader Market Sentiment tool shows that traders are growing more bearish despite the recent sharp price reversal.
With 60% of traders currently bullish it should be noted that this current sentiment reading is highlighting that sterling still has much scope to trade even lower also.
GBPUSD Short-term Technical Analysis
Looking at the four-hour time frame, a clear price range breakout has not yet emerged for sterling, with the break happening around the 1.1800 level.
A bullish inverted head and shoulders pattern is also close to being invalidated. According to the overall size of the pattern, I would expect that we could soon see a further 400 points more upside in GBPUSD.
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GBPUSD Medium-term Technical Analysis
According to the daily time frame it shows that that GBPUSD pair is starting to move towards its 200-day moving average, which is located close to the bottom of its short-term range.
According to the technical analysis a breach of 1.1800 would be bad news, and it really depends how far bears can take GBPUSD with 1.1650 or 1.1400 the preferred swing areas.
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