Forex technical analysis: GBP/USD drop is a bearish sign

Technical Analysis

Author: Adam Button | gbpusd

The pound is the worst performer today

After holding steady through CPI numbers, cable began to come under constant pressure. It continued to trace out news lows throughout US trading, falling to 1.5328 from as high as 1.5457.

Technically, the decline is leaves the pair in a troublesome spot but with one line of support left.

I sniffed out the GBPUSD weakness yesterday, writing that "in  the bigger picture, the bounce in the pound appears to be over."

That was after the failure at the 50% retracement and what looked like it would be a deeper loss yesterday. Cable managed to bounce 50 pips from there but has once again resolved to the downside today and fell below last Thursday's low.

That's a bearish signal but I'd like to see a fall below the July low of 1.5330 before adding to shorts.

One spot to watch on the economic calendar is the UK weekly earnings, ILO unemployment and claimant count data -- all due at 0830 GMT tomorrow.

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