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Forex: GBP/USD completes ‘bear flag’ pattern on daily chart

FXstreet.com (Barcelona) - The Sterling closed the session down 56 pips at 1.5301. Earlier in the session, the RICS Housing Price was released which came in at 1% actual vs. 2% estimate. Expect volatility to really pick up later in the week when get UK Claimant Count Change and the BOE Quarterly Inflation report. The pair is currently trading up 20 pips at 1.5318 during Asia trade.

According to Kathy Lien of BK Asset Management, “Wednesday's Inflation report and employment numbers are the central focus for the pound this week. Based on recent economic reports, the central bank could be slightly more optimistic. In general, the fear of inflation has limited the support for more stimulus and good data would further reduce the chance of easing.”

From a technical perspective, the pair closed below the short term uptrend line (1.5360) which has been forming since the rebound off the lows back in early February. On the daily chart, this can be viewed as a ‘bear flag’ continuation pattern which has now been completed and has a longer term measured move price target of down near 1.4630. The pattern would be negated should the pair close back above the 1.5360 level.

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