GBP/USD has been trading with a bearish bias in a volatile manner after the Bank of England raised interest rates last week. The bearish pressure was bit of a surprise for the market as GBP was expected to receive a boost from the increase of Official Bank Rate to 0.50% from the previous value of 0.25%. The MPC votes were also bullish for the currency but still GBP failed to gain the bullish momentum against USD last week. Today, The UK BRC Retail Sales Monitor report was published with a negative value of -1.0% which previously was positive at 1.9% and Halifax HPI report was also published with a decreased value of 0.3% from the previous value of 0.8% but slight better than expectation of 0.2%. The worse results of the economic reports added to the bearish pressure for GBP and signaled a further bearish trajectory. On the USD side, today IBD/TIPP Economic Optimism report is going to be published which is expected to increase to 51.2 from the previous figure of 50.3, JOLTS Job Opening report is expected to show a decrease to 5.98M from the previous figure of 6.08M, Consumer Credit report is expected to show significant growth to 18.4B from the previous figure of 13.1B. Besides, FOMC Member Quarles and Fed Chair Yellen are going to speak today about the nation’s key interest rates and monetary policy. Both of them are expected to be hawkish. To sum up, USD is currently looking forward for the Rate Hike in December whereas weakness of GBP signals that USD is likely to gain further momentum in the future taking the price much lower.
Now let us look at the technical chart. The price is currently residing inside the resistance area of 1.3140-1.3270 area and below the dynamic level of 20 EMA which indicates that the price bears are still in control and further bearish pressure towards 1.2800 support area is expected in the coming days. As the price remains below 1.3270 resistance area with a daily close, the bearish pressure is set to continue further.