Can GBP/USD Break The 1.3400 Resistance?10 July, 2018 by Aayush Jindal in Market Analysis
- The British Pound traded higher recently and broke the 1.3260 resistance against the US Dollar.
- There is a crucial bullish trend line formed with support at 1.3220 on the 4-hours chart of GBP/USD.
- China’s CPI in June 2018 posted an increase of 1.9% (YoY) similar to the forecast.
- Today in the UK, the Manufacturing Production for May 2018 will be released, which is forecasted to increase 0.7% (MoM).
GBPUSD Technical Analysis
The British Pound started a decent upward move from the 1.3050 low against the US Dollar. The GBP/USD pair climbed above the 1.3180 and 1.3240 resistance levels to move into a positive zone.
Looking at the 4-hours chart, the pair is in a steady uptrend from the 1.3049 low. It recently settled above the 1.3200 resistance, 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).
More importantly, there was a break above the last swing high at 1.3315, opening the doors for more gains. The next stop could be the 1.236 Fib extension level of the last decline from the 1.3315 high to 1.3049 low near 1.3380.
A successful break above the 1.3380 resistance may perhaps push the pair above the 1.3400 resistance. On the other hand, if there is a downside correction, the pair might find support near 1.3200.
There is also a crucial bullish trend line formed with support at 1.3220 on the same chart, which is close to the 100 SMA. Therefore, as long as the pair is above the 1.3200 support area, it is likely to accelerate gains above the 1.3330 level.
Today, there are a few key releases in the UK, including Industrial and Manufacturing Production (May 2018). The market is looking for an increase in the production, compared the last time decline. If the actual result is around the forecast, it may well help GBP/USD in moving further higher.
Economic Releases to Watch Today
- UK Industrial Production for May 2018 (MoM) – Forecast +0.5%, versus -0.8% previous.
- UK Manufacturing Production for May 2018 (MoM) – Forecast +0.7%, versus -1.4% previous.
- UK Trade Balance non-EU for May 2018 – Forecast £-3.60B, versus £-5.37B previous.
- UK Goods Trade Balance for May 2018 – Forecast £-11.950B, versus £-14.03B previous.
- German ZEW Economic Sentiment for July 2018 – Forecast -18.2, versus -16.1 previous.