Bullish Pennant on GBPUSD Hints at More Upside Potential; Keep Tabs on These Levels

GBPUSD
GBPUSD

GBPUSD has been trading within a tight range for the past few trading hours. Since yesterday’s European session, the currency pair’s upward movement has been limited at 1.2454. On the other hand, it has found a floor at 1.2397. Can we expect a breakout today?

In terms of economic data, there are a few low-tier reports scheduled on the calendar today before the much-anticipated FOMC rate decision due tomorrow. At 11:00 am GMT, the CBI Realized Sales report, which is considered a gauge for consumer spending in the UK, is eyed at -45. Then at 3:00 pm GMT, the Conference Board Consumer Confidence report in the US for April is expected to come in at 88.3 for April.

Positive UK data or a disappointing US figure could trigger a bullish run on GBPUSD. Alternatively, negative UK data or an impressive US report could push the currency pair lower.

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GBPUSD Outlook

On the 1-hour time frame, we can see that GBPUSD has spent the past couple of trading days in a consolidation. Because this follows after a strong rally, a bullish pennant seems to have formed. This is a bullish continuation indicator which means that an upside break, around the highs of April 27 at 1.2452, could mean a potential rally to the highs of April 14 at 1.2646. 

On the other hand, a close below yesterday’s low at 1.2398 would invalidate this bullish signal. Instead, it could mean that there are still sellers in the market who could push GBPUSD to 1.2365. This price offers a confluence of support from the 100 SMA and the rising trend line from connecting the lows of April 21, April 22, and April 24. 

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