GBP/USD drops to key level ahead of US data dump

The cable is sliding again...

The cable is coming under pressure again ahead of today’s US data dump starting at 13:30 BST. The GBP/USD was approaching yesterday’s low and old support at around 1.2150-70, threatening to break lower. Here is what’s coming up next:

Here is the intraday chart of the GBP/USD:

GBP/USDSource: TradingView and ThinkMarkets

We are watching the cable closely to see whether:
  1. There is a clean breakdown, or
  2. A false break down
If scenario 1 plays out i.e. a clean break below the 1.2150-70 support range and a hold below this zone, then we would be looking to the retracement levels on the chart for the next downside objective for the bears.

However, if price breaks the abovementioned support but quickly recovers to close back within the prior range, then this would be considered bullish because of the lack of supply below this key zone.
So, watch price action closely as it could provide good technical indications in terms of what might happen next.