GBP/USD Ahead of UK Jobs and US CPI Data

Aside from marginal strength against the Swiss franc, sterling is underperforming across the G10 space as of writing, with notable losses versus the Australian dollar (AUD), the New Zealand dollar (NZD), Swedish krone (SEK), euro (EUR), British pound (GBP) and US dollar (USD).

Weekly Trendline Resistance

Technically, the downside move was unsurprising on the weekly chart as price revisits the trendline resistance from the high of $1.4250. While a reaction has occurred, early May also saw a similar response though it failed to print much in the way of follow-through selling, pencilling in a low of $1.2308 in late May.

This questions the reliability of the trendline resistance and could eventually observe price clear the aforementioned trendline resistance and approach weekly resistance priced from $1.2767. If price action remains south of the trendline resistance, on the other hand, and assuming the currency pair ventures beyond $1.2308, weekly support calls for attention as far south as $1.1851.

Supporting a bearish vibe, price action on the daily timeframe engulfed trendline support in May, drawn from the record low of $1.0357. Since forming the $1.2308 low (see above), we have seen a pullback to a high of $1.2599. Whether this is a move with any substance is difficult to judge (ultimately, further selling from here would help prove the trendline support breach and reaffirm the weekly timeframe’s position). Should additional underperformance unfold, support resides at $1.2272.

$1.25 Resistance?

Out of the H1 timeframe, I see the unit elbowed through $1.25 recently and is poised to retest the lower boundary as resistance. I know some traders will be watching the structure to the left of the price between $1.2427 and $1.2453 to form potential support (blue curve), though trendline support taken from the low $1.2368 is also in view. Therefore, considering the weekly timeframe responding from trendline resistance and scope to explore lower ground on the daily timeframe after snapping below trendline support, further downside south of $1.25 is possible for the pound, targeting at least the noted H1 trendline support.

Charts: TradingView

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