GBP/USD Price Forecast: Hits fresh intra-week lows after failure at 1.3660 resistance

The British Pound (GBP) pares gains against the US Dollar (USD) on Wednesday, with bears testing the bottom of the intra-week trading range at the 1.3620 area, after failure to breach resistance at 1.3660. US Dollar bulls, however, remain subdued, awaiting the release of July’s US Personal Consumption Expenditures (PCE) Price Index, due later on the day.

Brown Brothers Harriman’s Elias Haddad expects PCE data to “echo the soft July CPI and retail sales data, giving the Fed room to stay on hold.” Haddad also urges investors to “watch the less noisy Dallas Fed trimmed mean PCE and the Cleveland Fed median PCE measures, due around the New York close, for a cleaner read on underlying inflation,” highlighting that “both moved closer to the Fed’s 2% target in June.”

Technical Analysis: Failure to break 1.3660 might lead to a deeper correction

GBP/USD trades just below 1.3620, holding a constructive bullish tone, although failure to extend gains beyond the 1.3660 area might trigger a deeper bearish correction. Momentum indicators show a moderately weaker upside traction, with the daily Relative Strength Index (14) near 65, after pulling back from overbought levels, and the Moving Average Convergence Divergence (MACD) indicator staying positive, altogether hinting at a positive trend.

A confirmation below the mentioned intra-week low at 1.3620 opens the path towards a previous resistance area around 1.3565 (July 15, August 17 highs). Further down, the next demand zone comes near 1.3520 (August 17, 18 lows)

On the topside, initial resistance emerges at the horizontal level of 1.3660, which has capped bulls several times in the last six months. A sustained break above this level would expose February's peaks, between 1.3716 and 1.3730.