Despite a sharp fall after release of worse than expected data about the UK retail sales, the cable managed to bounce off from the bottom trend-line of a large and by Monday morning restore lost positions returning back to the 1.32 level. However, the pair is not expected to climb higher this day, as the further road to the north is obstructed by a combination of the 200-hour and the upper edge of a dominant , which has already managed to neutralize the surge couple of times. But even in the case of a breakthrough in weekly perspective the Pound is likely to lose value against the Dollar because of release of information on the UK Preliminary GDP, which might appear to be below the 0.3% growth rate.
The reason for that is quite unclear, as the pair had already passed the last resistance level above the 1.3250 mark during the early hours, when the rate suddenly began to fall.
However, after passing various support levels the pair’s decline was stopped by the combined support of the 55 and 100-hour SMAs.
In regards to the future outlook, it seems that the surge is set to continue, as the pair has broken the resistnace of the long term channel down pattern.
Due to growing fears about hard Brexit possibility the Sterling depreciated against the Dollar by 104 basis points. From technical perspective this plunge matched with a rebound from the upper trend-line of a dominant descending channel towards the bottom edge of a smaller ascending channel. Until release of data on the UK quarterly GDP the cable is likely to consolidate near the 38.2% Fibonacci retracement level located at the 1.3145 mark.
In case of positive news the pair might surge straight to the 1.3170 level that will be secured by the 100- and 55-hour SMA. In the opposite scenario, there is a high chance that bears will succeed to push the pair from the symmetrical triangle pattern. In that case the Pound most probably is going to depreciate against the Dollar in the foreseeable future.