GBP/USD rebounds sharply intraday

larger than expected decline in U.K. GDP was offset by strong U.S. economic data on Tuesday.

Charts (2)

In Europe, U.K. GDP declined 2.2% in the first quarter according to the latest estimate after remaining stable in the previous quarter. It was expected to decline by 2.0%. The Euro-zone year-on-year inflation was released in line with expectations at 0.8%, after 0.9% in April.

On the U.S. economic data front, Market News International's Chicago Business Barometer rose to 36.6 on month in June (45.0 expected), from 32.3 in May. The Conference Board's Consumer Confidence Index  jumped to 98.1 on month in June (91.5 expected), from a revised 85.9 in May. 

We have been monitoring the downtrend in the GBP/USD since the middle of June. Every time we see an intraday rally towards the declining trend line resistance area it has been an opportunity to sell the pair. As long as 1.241 can remain resistance and the declining trend line is not breached to the upside, we will continue to ride the trend lower. Look for a retest of 1.2255 support and a possible move lower. 



Source: GAIN Capital, TradingView

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