This week, the GBP/USD has remained range bound within the narrow price range between the 1.5450 and the 1.5675 levels. Interestingly, the GBP/USD price tried to penetrate above the 1.5675 resistance zone three times since July 15, but failed to move above this level.
Yesterday, the US Department of Labor released the weekly unemployment claims figure, which came out at only 255,000 against a forecast of 279,000. In addition, the UK’s month-over-month data from the Office for National Statistics suggested the value of retail sales in the UK has decreased by 0.2% over the past month. Both of these data turned the fundamental outlook for the GBP/USD bearish in the global binary options market.
As a result, the GBP/USD declined around 170 pips over the course of the day, reaching as low as the Big Round Number (BRN) 1.5500. The large fall in the GBP/USD price ended up forming a Bearish Outside Bar (BEOB), as it engulfed over both the high and low of last four candlesticks on the daily time frame.
Although the medium-term outlook for the GBP/USD has remained bullish since the end of May, the changing market fundamentals suggest that it may be set for a retracement towards the uptrend line in the next few days.
Also, the forming of the BEOB after getting rejected at the near-term resistance around 1.5675 level also indicate a bearish technical development in the market.
Hence, it is recommended that traders may consider placing a PUT order for the GBP/USD with their binary options brokers once the price penetrates below the 1.5490 level.