GBP/USD breached the channel
GBP/USD closed below $1.5300 yesterday. The pair returned inside the daily Ichimoku Cloud. It has been sliding since the beginning of May after it retraced 50% of the decline from January to March and almost reached 200-day MA. Pound has breached support of the upside channel in the $1.5370 area – this may be considered as a bearish flag. Bearish pressure has clearly increased and sterling may weaken to $1.5200 and below $1.4800 in the medium term. The bulls need to push GBP above $1.5400 to negate the bearish outlook and resume the uptrend.
Events to watch this week: UK employment data (Wednesday, 8:30 GMT), Bank of England’s Quarterly Inflation Report (Wednesday, 09:30 GMT). The fear of inflation has limited the support for more stimulus measures. Good data would reduce the chance of further easing.